This paper employs a spatial dependency framework to examine intermediary roles played by trade, institutional quality and natural resource endowment in determining direct and indirect (spillover) effects of inbound foreign direct investment (FDI) on economic growth. We develop a number of spatial mechanisms to assess how these intermediary factors limit and/or enhance the effect of FDI on economic

This paper explores the links between policy support, export destinations and product quality. Depending on the export industry and target destination (policy support, income level), the theories suggest a competing relationship between policy support and high-income exporting on quality upgrading. Consistent with the notion that policy support only matters when exporting to low-income destinations

The world has been experiencing dramatic demographic change since the 1950s, with almost all countries facing ageing challenges this coming century. However, the timing and speed of this demographic transition are significantly asymmetric across countries. This paper examines the impacts of global demographic change on macroeconomic conditions, international trade and capital flows in major economies

A significant proportion of trade in Africa takes place informally. In this paper we postulate that informal trade is more sensitive to security-related trade costs than formal trade. To test this hypothesis, we combine unique aggregated survey data on Uganda’s informal cross-border trade with formal customs data and exploit the spatial and time variation of the South Sudanese civil war to causally

This study examines the effect of education export on economic growth and development, using Australia as a case study since it is one of the top destinations for international students. International education has played a vital role in Australia’s economy over the last three decades, becoming the third-largest export of Australia after iron ore and coal, and earning AU$40.3 billion in 2019. The sector

We analyse the global effects from the austerity policies recently implemented in the EU, by developing an extension of the GTAP general equilibrium model. The extended model incorporates a new specification of the trade balance (i.e., endogenous), the labour market (i.e., unemployment under a wage curve framework) and the public sector (i.e., split from the representative national agent, with endogenous

Empirical studies emphasise that higher financial development (FD) amplifies the output cost of banking crises. However, no study has so far investigated the effect of FD on another key dimension of banking crises, namely their duration. Using a large sample of banking crises over the 1977–2014 period, we find that higher FD is associated with a significant increase in the duration of banking crises

Export entry deterrence is a result of export uncertainty, which inhibits the discovery of new exports and prevents a country from realising its true comparative advantage. This paper examines how firms resolve uncertainty through the combination of two learning channels: learning from others and their own export experience. Using Chilean customs data (2007–2016), I find that early entrants have a

This paper tries to examine how the COVID-19 shock affects different countries through their regional integration and their exposure to Global Value Chains (GVCs). Using input–output tables from the EORA dataset, our contribution is threefold. First, we conceptually revise the approache to analyse input–output relationships and underline the difference between the bilateral flow of value added and

Central Bank operational frameworks can be challenged during times of severe financial stress. Typical of such an instance is where policymakers attempt to heavily manage or fix a domestic exchange rate whilst faced with balance of payments pressures. However, it is claimed to be impossible for policymakers to achieve both monetary independence and exchange rate stability if the domestic economy were

By using panel data on Italian manufacturing firms, this paper contributes to the literature on the nexus between firms’ internationalisation and innovation performance, taking into account the impact of different internationalisation strategies (with a focus on exports, foreign direct investments and outsourcing) on firms’ product and process innovation. Being robust to the implementation of different

In the age of globalisation, international trade and foreign direct investment (FDI) have become integral elements of cross-country production sharing. In this paper, we empirically assess the impact of FDI, as well as capital dynamics and structure on the formation of global value chains (GVC) at country and sectoral levels based on a sample of European countries over the period 2000–2014. We find

The post-1945 global trading system was designed around the principle of non-discrimination. During the 1947–94 GATT era, regionalism and multilateralism were often viewed as antagonistic approaches to international trade, and preferential treatment within regional blocs was to be deterred. Since 1995, although regional trade agreements are monitored by the WTO Secretariat and presented as a threat

Free Trade Agreements (FTAs) usually come with restrictions on the use of intermediate inputs in order for final goods to qualify for free trade. I focus on Rules of Origin (RoO), which limit expenses on nonmember country's intermediate inputs. In a three-country FTA formation game, I introduce international trade in intermediate inputs and RoO restrictions. In the case of symmetric countries, I show

The dominance of large resource-rich hegemonic economies, most notably Nigeria and South Africa, with extensive trade and possible financial linkages, exposes other Africa countries to intra-regional spillovers. However, this strand of empirical analysis remains largely unstudied, as extant studies are mostly devoted to investigating the implications of external (global) shocks. This paper contributes

This paper examines the intellectual contributions of Professor W. M. (‘Max’) Corden to Economics. We focus on three main fields: trade theory and practice, especially his pioneering work on the theory of effective protection; open economy macroeconomics, including exchange rate policy, the international monetary system, Dutch Disease and economic crises; and Australian economic policy. We emphasise

Convex vacancy creation costs shape firms’ responses to trade liberalisation. They induce capacity constraints by increasing firms’ costs of production. A profit maximising firm will therefore not fully meet the increased foreign demand, but serve only a few export markets. More productive firms will export to more countries and profit more from trade liberalisation. To get an effect of trade liberalisation

Global value chains (GVCs) are a major feature of globalisation, with a strong impact on the patterns of international trade. In this paper, we study the link between GVCs and cross-border mergers and acquisitions (M&As), testing the two symmetric hypotheses that a higher degree of participation in GVCs increases the probability that a firm acquires: (i) the producers of their imported inputs or (ii)

By exploiting a unique data set on aid allocation by major Arab donors, this paper explores the relationship between aid allocation and the strategic alignment of donors with recipients as well as the developmental need of recipients. To motivate our empirical work, we first develop a new theory of aid allocation, wherein a representative donor country's payoff depends on both the well-being of the

This paper obtains a versatile measure of non‐price competitiveness factors (NPCF) based on a simple international trade model. Trade frictions are reinterpreted as the NPCF conditions (inferior product quality, suboptimal geographical and industry specialisation of exports and any other limitations of the production and exporting channels) that inhibit trade. The set‐up is applied to the five largest

We extend the small country trade model with firm heterogeneity (Demidova and Rodriguez‐Clare, Journal of International Economics, 90, 2013 and 266) to incorporate offshoring (along with final goods trade). We derive the firm‐level employment implications of output and input trade and trade costs and test them using Korean firm‐level data for the period 2006–2016. A key theoretical result is that the

This paper uses unconditional quantile regression methods to evaluate the incidence of GATT/WTO membership on poverty in countries with different poverty rates. My results suggest that GATT/WTO membership increases significantly poverty across the entire unconditional distribution of poverty. Countries with the highest poverty rates incur larger poverty increases after joining GATT/WTO than countries

This paper makes an innovative contribution to the extant literature by analysing the determinants of economic stimulus packages implemented by governments in response to the COVID‐19 pandemic. In particular, we explore whether stock market declines observed in many countries can predict the size of COVID‐19 stimulus packages. Moreover, we explore whether a country's level of income can augment the

We study the drivers governing external disequilibria through a Global VAR (GVAR) analysis applied to a group of 24 countries during the period 1972–2017. The GVAR methodology is particularly well suited for our research question. First, it permits to measure the effects of both domestic and foreign country‐specific shocks. Second, it allows us to analyse the long‐run relationships and dynamics through

This paper studies the trade effects of COVID‐19 using monthly disaggregated trade data for 28 countries and multiple trading partners from the beginning of the pandemic to June 2020. Regression results based on a sector‐level gravity model show that the negative trade effects induced by COVID‐19 shocks varied widely across sectors. Sectors more amenable to remote work contracted less throughout the

This study analyses the process of economic integration in Latin America. Making use of a structural gravity model and including intra-national trade flows, this paper provides an ex-post assessment of the effect of the trade agreements (TAs) signed by Latin American countries on international trade. We account for the last wave of TAs proliferation and estimate treaty-level effects. On average, TAs

This paper presents new high‐frequency data on trade policy changes targeting medical and food products since the beginning of the COVID‐19 pandemic, documenting how countries used trade policy instruments in response to the health crisis on a week‐by‐week basis. The data set reveals a rapid increase in trade policy activism in February and March 2020 in tandem with the rise in COVID‐19 cases but also

This paper explores the role of a firm's product and/or market export experience and experimentation for survival of new product‐destination export spells, using firm‐level Spanish customs data over the period 1997–2015. Previous research has documented a positive impact of experience on export survival. This paper contributes to the extant literature by unravelling the distinct effect on export survival

The aim of this paper is to analyse the effects of quality competitiveness based on technological innovation on the bilateral trade of goods. Our approach is based on the estimation of an import demand model that uses the data for 19 manufacturing sectors across 28 OECD countries over the period of 1998–2012. In the first step, to identify quality from prices, the logarithm of unit value (a proxy of

This paper analyses a prominent dimension of the initial policy response to the COVID‐19 pandemic observed in many countries: the imposition of export restrictions and actions to facilitate imports. Using weekly data on the use of trade policy instruments during the first seven months of the COVID‐19 pandemic (January–July, 2020), we assess the relationship between the use of trade policy instruments

We are delighted to see Dr Alan King's interest and curiosity in the subject of PPP and, in particular, this paper of ours. This is a Rejoinder to his Comment.