scholarly journals Trade policy in a “GVC World”: Multinational corporations and trade liberalization

2020 ◽  
Vol 22 (4) ◽  
pp. 639-666
Author(s):  
Christina Anderer ◽  
Andreas Dür ◽  
Lisa Lechner
Keyword(s):  
Trade Policy ◽  
Trade Liberalization ◽  
Multinational Corporations ◽  
Market Access ◽  
Global Network ◽  
Policy Outcomes ◽  
Firm Level ◽  
Foreign Countries ◽  
Globalized Economy ◽  
International Mergers

AbstractThe globalization of production is changing the political economy of trade policymaking: Traditional supporters of free trade (exporters seeking market access in foreign countries) are joined by new actors (companies needing intermediates from abroad for their production processes) in their lobbying efforts for trade liberalization. Multinational corporations (MNCs) play a crucial role in this new alliance due to their strong involvement in international trade and endowment with resources that can be used to lobby policymakers. We derive an argument from these premises that leads to the expectation of variation in trade policy outcomes across industries depending on their degree of integration in a global network of multinational corporations. Disaggregated data on the level of tariffs and speed of tariff cuts in preferential trade agreements, international mergers and acquisitions at the firm level, and MNC imports of intermediates by sector allow us to test the argument. The findings support our theoretical expectations. The paper sheds light on the processes and outcomes of trade policymaking in a globalized economy by further developing an existing argument about GVCs and trade policy outcomes as well as expanding on it by adding data on international corporate connections.

scholarly journals From Selling Goods to Selling Services: Firm Responses to Trade Liberalization

2018 ◽  
Vol 10 (4) ◽  
pp. 79-108 ◽  
Author(s):  
Holger Breinlich ◽  
Anson Soderbery ◽  
Greg C. Wright
Keyword(s):  
European Union ◽  
Trade Policy ◽  
Trade Liberalization ◽  
Firm Level ◽  
Successful Transition ◽  
Provision Of Services ◽  
Firm Responses

In this paper, we focus on a new channel of adaptation to trade liberalization, namely the shift toward increased provision of services in lieu of goods production. We exploit variation in European Union trade policy to show that lower manufacturing tariffs lead firms to shift into services provision and out of goods production. We also find that a successful transition is associated with higher firm-level R&D stocks. (JEL D22, F13, F14, L16, L60, L80)

AGGREGATE MARKUP DYNAMICS: EVIDENCE FROM CHINA

2021 ◽  
pp. 1-21
Author(s):  
YUE WEN
Keyword(s):  
Trade Liberalization ◽  
Decomposition Method ◽  
Dynamic Change ◽  
Manufacturing Firms ◽  
Sample Period ◽  
Upward Trend ◽  
Firm Level ◽  
Industry Level ◽  
New Perspective

Unlike previous studies that focus on the change of firm-level markup, this study focuses on the change of industry-level aggregate markup. From the data of China’s manufacturing firms in 1999–2007, this study exploits the dynamic change of aggregate markup by using the decomposition method which is proposed by Melitz and Polanec (2015). The result shows that China’s manufacturing aggregate markup has an upward trend during the sample period, which mainly comes from the contribution of surviving firms. On the contrary, the contribution of entering and exiting firms to the aggregate markup is negative. Further analysis shows that trade liberalization is one of the reasons to promote the increase of China’s manufacturing aggregate markup. This study provides a new perspective for understanding the dynamic change of the aggregate markup.

Divided Government and U.S.Trade Policy: Much Ado About Nothing?

2000 ◽  
Vol 54 (4) ◽  
pp. 825-844 ◽  
Author(s):  
David Karol
Keyword(s):  
Trade Policy ◽  
Policy Preferences ◽  
Divided Government ◽  
Policy Outcomes ◽  
Trade Policies ◽  
Trade Barriers ◽  
Party Affiliation ◽  
Consistent Effect ◽  
Much Ado About Nothing

Scholars assert that divided government impedes the liberalization of U.S. trade policy. They claim that presidents favor freer trade and will use the negotiating authority Congress delegates to them to reach agreements lowering trade barriers. Since presidents gain more support from their congressional co-partisans, less liberalization ensues under divided government. This theory rests on the premise that party is unrelated to congressional trade policy preferences beyond legislators' tendencies to support their presidential co-partisans. Yet before 1970 congressional Democrats were relatively free trading regardless of the president's party affiliation. Since then, the same has been true of Republicans. Divided government facilitates the trade policies of presidents from the protectionist party since they win more support from their “opposition” in this area. Divided government does impede the efforts of presidents from the free-trading party to liberalize. I conclude that divided government has no consistent effect on trade policy outcomes.

scholarly journals Pakistan’s Experience with the Pakistan–China FTA: Lessons for CPEC

2017 ◽  
Vol 22 (Special Edition) ◽  
pp. 1-24 ◽  
Author(s):  
Theresa Theresa ◽  
Nida Jamil ◽  
Azam Chaudhry
Keyword(s):  
Free Trade Agreement ◽  
Market Access ◽  
Value Added ◽  
Trade Agreement ◽  
Policy Implications ◽  
Firm Level ◽  
Trade Data ◽  
Chinese Markets ◽  
The Impact ◽  
Tariff Reductions

As Pakistan enters the CPEC era, there is a sense of optimism as well as concern in the country, given the uncertain economic impact of this major collaboration between China and Pakistan. Using firm-level and trade data, we empirically test the impact of the 2006 free trade agreement (FTA) between the two countries on the productivity, size and value added of potentially affected Pakistani firms. These results have important policy implications for CPEC initiatives. We start with a difference-in-difference analysis, comparing trends in those sectors in Pakistan made more vulnerable by tariff reductions on Chinese goods relative to sectors for which the tariff did not change significantly. Next, we examine those sectors in Pakistan that were given greater access to Chinese markets through reductions in the Chinese tariff on Pakistani goods relative to sectors for which market access remained roughly the same. In the sectors made more vulnerable by reductions in Pakistani tariffs on Chinese goods, imports to Pakistan have risen, while productivity, value added and value added per worker have fallen relative to other sectors since the FTA. In the sectors for which Pakistan gained access to Chinese markets, exports and employment have risen, but productivity and value added have fallen relative to other sectors since the FTA.

scholarly journals Toward Internationally Regulated Goods: Controlling the Trade in Small Arms and Light Weapons

2010 ◽  
Vol 64 (1) ◽  
pp. 97-131 ◽  
Author(s):  
Asif Efrat
Keyword(s):  
Trade Policy ◽  
Trade Liberalization ◽  
General Trend ◽  
Theoretical Framework ◽  
Negative Externalities ◽  
International Regulation ◽  
Small Arms ◽  
Death Toll ◽  
Conventional Models ◽  
Original Survey

AbstractContrary to the general trend of trade liberalization, specific goods—such as small arms, drugs, and antiquities—have come under increasing international control in recent decades through a set of international regulatory agreements. This article offers a theoretical framework of government preferences on the international regulation of these goods. Departing from conventional models of trade policy, the theoretical framework introduces negative externalities, rather than protection, as the motivation for restricting trade; it also takes moral concerns into account. I test this framework empirically through an original survey of government views on international small-arms regulation. Based on interviewing officials from 118 countries, the survey reveals a large variation in government preferences that conforms to the theoretical expectations. I employ this variation to explain why the international regulation of small arms is weak, despite the fact that these are the deadliest weapons of all in terms of actual death toll.

Free Trade and the Widening Gap Between Rich and Poor Countries

2001 ◽  
Vol 8 (2) ◽  
pp. 24
Author(s):  
Kelli Ketover
Keyword(s):  
Trade Policy ◽  
Multinational Corporations ◽  
Free Trade ◽  
Fair Trade ◽  
Well Being ◽  
Policy Debate ◽  
Poor Countries ◽  
Distribution Of Wealth ◽  
Free Trade Policy ◽  
The Right

The gap between the world's poorest nations and the world's wealthiest nations continues to grow despite the promises made by the proponents of globalization. Increasingly, however, “new internationalists" argue that free trade policy should be reconstituted as fair trade policy. Current policies have only served to strengthen the influence multinational corporations have over the policy debate. The tradeoff has often been at the expense of qualities not easily measured in economic terms such as human rights, depletion of natural resources, and inequitable distribution of wealth. Future trade policy will have to contend with competing forces issuing from those fearing loss of national sovereignty on the right and others concerned with social and environmental well being on the left.

Social and Political Drivers of the Reorientation of U.S. Trade Policy: The Case of U.S. Withdrawal from the Trans-Pacific Partnership

2019 ◽  
Vol 6 (3) ◽  
pp. 199-218 ◽  
Author(s):  
Jesse Liss
Keyword(s):  
United States ◽  
Trade Policy ◽  
Multinational Corporations ◽  
Quantitative Methods ◽  
Political Power ◽  
Political Influence ◽  
The United States ◽  
Qualitative And Quantitative Methods ◽  
Stakeholder Groups ◽  
Sociological Explanation

Previous sociological studies demonstrated that U.S. multinational corporations (MNCs) had durable political power to motivate U.S. trade policy. However, why did the United States switch from a “free trade” to an “America First” trade agenda? Economists and political scientists argue that protectionist voters elected the protectionist candidate—Trump. An alternative sociological explanation is that U.S. MNCs lost political power to competing stakeholder groups. The article uses qualitative and quantitative methods to test these competing theories using the case study of the U.S. withdrawal from the Trans-Pacific Partnership (TPP). The article argues that both theories are necessary, and neither are sufficient. The United States withdrew from the TPP because increasing negative effects of trade and investment in the United States reshaped trade politics, especially on the republican side; however, power relations between stakeholder groups had to shift as well. U.S. MNCs lost political influence over trade policy to new domestic manufacturing organizations and their networks with labor and fair trade coalitions.

scholarly journals Revenue Impacts of MPP Branded Funds: A Firm-Level Analysis

2003 ◽  
Vol 32 (2) ◽  
pp. 184-197 ◽  
Author(s):  
Paul M. Jakus ◽  
Kimberly L. Jensen ◽  
George C. Davis
Keyword(s):  
Firm Size ◽  
Market Access ◽  
Major Change ◽  
Export Promotion ◽  
Firm Level ◽  
Promotion Program ◽  
Domestic Firms ◽  
Market Promotion ◽  
Access Program ◽  
Level Analysis

The USDA's Market Access Program (formerly Market Promotion Program) recently underwent a major change to redirect all branded products export promotion funds to small domestic firms and cooperatives. The redirection responded to criticisms by the General Accounting Office of past allocations of branded products export promotion funds to large, experienced exporters. This study uses a firm-level analysis to examine whether firm size and export experience matter in how effectively firms use the promotion funds to increase their revenues. The results support neither the GAO criticisms nor the recent program redirection.

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