international labor and capital flows complements or substitutes in a global context foreign direct investment fdi and migration substitute one another in the matching process between workers and firms yet migrants provide information about future investment opportunities in their country of origin evidence from u s data is consistent with contemporaneous substitutability and dynamic complementarity between migration and fdi

the export effect of immigration into the usa much has been written on the connection between migration and international trade human history provides important examples of migrations leading to increased trade activity with perhaps the most well known example of the overseas chinese this study investigates the trade related importance of chinese and other immigrants into the usa previous studies may have underestimated or overestimated the relationship between trade and migration with nations treated as featureless plains rather than as varied landscapes this study contends that an understanding of the immigration trade relationship can be improved upon by examining the specific pattern and destination of immigration into specific us states using state level export data to 28 immigrant source countries in 1993 a strong immigration trade link is found reinforcing conclusions made by previous research using country level data the compelling connection between immigration and trade found in this study and others suggests that future change

drivers and inhibitors of renewable energy a qualitative and quantitative study of the caribbean abstract we explore the factors that affect the development of renewable energy in the caribbean the caribbean region can serve as a laboratory in studying the institutional issues relating to energy development due to the differences in political jurisdictions over a short distance based on 12 case studies and 75 in depth interviews with a variety of stakeholders we identified five factors that appear to be critical for the development of renewable energy in the caribbean entrepreneurship attitudes the role of local champions the electric utility influence informal institutions and the influence of international agencies we built a multiple regression model to test these relationships through a survey of 34 political jurisdictions in the caribbean the statistical analysis we conducted suggests that informal institutions have a significant impact on the extent of renewable energy development while the incumbent electricity utilities influence may impede the development of renewable energy based on these findings we provide recommendations on how best to make use of these factors identified in order to develop effective energy policies throughout the caribbean

using local labor market data to re examine the employment effects of the minimum wage using quarterly census data for 1996 2000 the author evaluates how minimum wages affected teenage employment at the county level an analysis that includes all counties yields small and statistically insignificant effects consistent with previous research using state panels however in counties where the minimum wage was likely binding above the market clearing wage for teens the negative impact on employment was considerably larger the effect was strongest in small counties was restricted to transitory jobs and new hires and apparently was not experienced by young adults ages 19 22 the small employment effects found in much of the literature the author argues at least partly reflect the estimates inclusion of local labor markets where the minimum wage is not binding by averaging the effects across all areas with no disaggregation based on where the minimum wage is binding and where it is not these studies overlook important regional variation

the consequences of minimum wage laws some new theoretical ideas economists generally agree that the effect of a binding minimum wage law is to move firms backward along the demand curve for low skill workers however this prediction of worker displacement depends critically on the assumption that the productivity of firms labor is not dependent on the wage in this paper we show that in a conventional efficiency wage model a minimum wage may increase the level of employment in low wage jobs the formal logic of our model is similar to the case of labor demand under monopsony but arises in a model with a large number of employers

international migration the brain drain and poverty a cross country analysis the aim of the paper is threefold first it empirically investigates the effect of international migration on poverty in origin countries using data from a cross country analysis second it explores the specific part of the income distribution from which migrants are drawn by comparing the effect of international migration on different income quintiles of the population finally given that the selection of migrants depends not only on the income level of their households but also on the skill levels of movers the paper casts some light on the implications of the emigration of skilled workers on poverty this article shows that the stock of international migrants have a positive effect on the income of the poor while it does not have a significant impact on the income of the middle and top quintiles of the population in particular a 10 per cent increase in the per capita stock of migrants resident in oecd nations augments the income of the poor by 1 per cent on average and ceteris paribus finally the poverty reducing effect of migration holds even when the emigration process selects the best and the brightest

the impact of common native language and immigration on imports this paper sheds light on the impact of common native language and immigration both jointly and separately on imports common native language and immigrant networks stimulate bilateral trade relationships by reducing transaction costs through both market creation and the removal of information asymmetries whereas evidence on the importance of weak links for trade provides support for the first channel the need for additional immigrants does not decline if the second mechanism proves to be a driver of trade relationships for estimation of a causal and nonlinear effect of the two common native language and immigration on imports we employ a flexible identification strategy which allows common native language and migration to be endogenous the results suggest that both common native language and immigration raise imports but the impact of common native language is ever increasing with its level whereas that of immigration is of declining importance as its level increases

reverse importing and asymmetric trade and fdi a networks explanation abstract this paper considers the impact of business and social networks on international trade and fdi i propose that differences in the strength of network effects across countries can produce asymmetric trade and investment flows that may lead to trade friction a firm from a country with strong network effects has a cost advantage in selling to buyers from its own country this advantage results in lower inward fdi lower total imports but larger volumes of reverse imports into the country with strong network effects the model s predictions match observed asymmetric trade and investment flows that sometimes lead to us japan trade friction

do trade missions increase trade in an effort to stimulate trade canada has conducted regular trade missions starting in 1994 often led by the prime minister according to the canadian government these missions generated tens of billions of dollars in new business deals this paper uses bilateral trade data to assess this claim we find that canada exports and imports above normal amounts to the countries to which it sent trade missions however the missions do not seem to have caused an increase in trade in the preferred specification incorporating country pair fixed effects trade missions have small negative and mainly insignificant effects dans un effort pour stimuler le commerce international le canada a mene des missions commerciales depuis 1994 souvent sous la direction du premier ministre selon le gouvernement canadien ces missions ont engendre des dizaines de millions de dollars en relations d affaires ce texte utilise des donnees sur le commerce bilateral pour evaluer cette proposition on decouvre que le canada exporte et importe des quantites au dessus de la normale vers et en provenance des pays ou il a mene des missions commerciales cependant les missions ne semblent pas avoir cause un accroissement du commerce dans la specification preferee incorporant les effets fixes des paires de pays les missions commerciales ont des effets faibles negatifs et en gros insignifiants

immigrant specificity and the relationship between trade and immigration theory and evidence studies routinely document that immigrant employment concentrates in non traded goods sectors and that many immigrants have low inter sectoral mobility we consider these observed characteristics of immigrant employment with regard to the question of how immigration affects a nation s pattern of production and trade we model an economy producing three goods one is non traded domestic labor and capital are domestically mobile but internationally immobile allowing that some new immigrants will become specific to the non traded goods sector the model indicates that the effects of immigration on output and trade depend importantly on the sectoral pattern of employment of both new and existing immigrants empirical investigation in a panel data set of oecd countries supports the model s prediction that immigration raises the output of non traded goods consistent with the model we also find that immigration and trade are complements given its empirical support the model s implications for immigration policy are then discussed

towards a sustainable electrification in ghana a review of renewable energy deployment policies abstract ghana has been facing perennial power rationing over the years due to fuel supply challenges the country s energy system is likely to suffer additional strain from rising energy demand fueled by population growth rapid urbanization and economic development fortunately there are enormous renewable energy resources which can provide sustainable electrification as backbone to socioeconomic development while curbing global warming ghana s energy strategy targets 100 access to electricity and 10 share of sustainable power in national generation mix by 2020 despite the existence of numerous policies and a renewable energy act current contribution of non conventional renewable energy to electricity generation is less than 1 the right mix of policies to address the unique domestic conditions and achieve its specific development goals remains insufficient this study reviews the regulatory framework financing incentives and other provisions of ghana s renewable energy act it critically examines the policy s strengths weaknesses opportunities and treats based on comparative analysis and lessons drawn from failed and successful implementation of similar policies around the world the study also assesses the impact of policy on project development it was found that the performance of ghana s renewable energy policy on grid connected electricity has been poor compared to its target the fundamental reasons for this unsatisfactory performance may be attributed to partial implementation of policies lack of market driven support schemes lack of pricing policy framework weak grid network limited access to funds and inconsistencies in renewable energy development strategies this study proposes the following countermeasures i ghana should comprehensively harmonize renewable energy regulatory and fiscal policies with domestic electricity pricing regime ii market driven support schemes should be prioritized for cost effectiveness and minimum governmental influence these reforms can help eliminate some of the major barriers to sustainable electrification in ghana while the lessons provide a learning curve for other african countries

do state borders matter for u s intranational trade the role of history and internal migration empirical evidence of the impact of borders on international trade flows using the gravity equation approach abounds this paper examines the empirical relevance of state borders in u s interstate trade for various specifications of the gravity equation we find a large and economically significant subnational border effect for some specifications however two model specifications drastically reduce if not eliminate the border effect i dynamic panel specifications controlling for past levels of trade and ii models conditioning on internal migration les resultats empiriques de l analyse des impacts des frontieres sur les flux de commerce international en utilisant les modeles de gravite sont devenus monnaie courante ce texte examine l impact des frontieres entre etats a l aide de cette technique il s avere que les effets de frontieres infranationales sont grands et significatifs pour certaines specifications du modele cependant deux specifications du modele reduisent dramatiquement s ils n eliminent pas l effet de frontiere i des specifications qui prennent en compte les niveaux anterieurs de commerce et ii des specifications qui dependent de la migration interne

different shades of green global oil and gas companies and renewable energy abstract the long term energy transition from fossil fuels to renewable energy raises critical questions about the future of oil and gas firms this study asks why some oil and gas firms are committed to renewable energy while others continue to maintain a distinct fossil fuels focus with little or no investment in renewable energy the analysis reveals that there is a wide range in the degree to which oil and gas firms have invested in renewable energy some firms have no investments and others have investments in multiple renewable energy technologies across many countries we examine a combination of country based institutional factors and firm based knowledge and experience factors that could impact oil and gas firms decisions to invest in renewable energy activity regulative and normative pressures impacted renewable energy investments as did environmental citizenship and the degree of internationalization the study s integration of country level factors with firm level experiences provides insights into how firms are dealing with the energy transition by examining areas such as sustainability and regulatory policy the paper sheds light on the ways in which scholars can tap into measures and methods that can extend traditional ib research

the state federal dichotomy in the effects of minimum wages on teenage employment in the united states abstract for the period 1984 1997 we find that state level minimum wage hikes had no negative employment impact whereas federal hikes did this dichotomy may account for the differences between the results of the new economics of the minimum wage and time series studies

social ties and international entrepreneurship opportunities and constraints affecting firm internationalization international entrepreneurship involves the identification and exploitation of opportunities for international exchange yet little is known about the entrepreneurial methods used for opportunity recognition while previous work emphasizes effects operating at the level of the business network i propose that the recognition of exchange opportunities is a highly subjective process shaped by entrepreneurs existing ties with others based on interview data collected from 41 managers i develop a comprehensive measure for classifying different methods of opportunity recognition i then use this measure to classify 665 international exchange ventures set up by entrepreneurs in four chinese cities in contrast with past research i find virtually no role for blind luck although the majority of exchange opportunities were discovered rather than sought these discoveries were intentional rather than accidental i also find that entrepreneurs idiosyncratic connections with others both promote and inhibit international exchange tie based opportunities lead to higher quality and more valuable exchanges that are constrained in terms of geographic psychic and linguistic distance from this i conclude that entrepreneurial networks have distinct opportunity horizons that limit the reach of tie based exchanges and potentially lead to sub optimal internationalization trajectories

international trade agreements and international migration despite large potential economic gains bilateral and multilateral negotiations focusing on liberalisation of migration have not shared the high profile of international trade negotiations and agreements migration and trade have been traditionally viewed rather separately and the relevance of the many and complex interdependencies has been given remarkably little attention in the literature to date in this article we focus on the two way interaction between international migration and agreements designed to enhance cross border trade and investment liberalisation of international trade in services and in the movement of people potentially offers much greater economic gains than liberalisation of remaining barriers to goods trade however progress within multilateral frameworks is fraught with difficulty the world trade organization s general agreement on trade in services gats has yielded little real progress so far and negotiations within more flexible unilateral and bilateral frameworks are likely to be more successful in liberalising the movement of labour we discuss a range of specific examples focusing particularly on the interesting case of new zealand we find that trade agreements are increasingly including agreements on migration though typically favouring temporary migration and involving numerically modest quotas we conclude that migration regulatory frameworks are likely to be further and more strongly linked to trade and investment agreements in the future particularly given changing economic and demographic forces the primary focus of migration policies may nonetheless remain different from that of trade policies while further migration liberalisation is likely to be through bilateral and regional agreements it will be important to try to lock in the gains of such agreements while simultaneously working to consolidating these in a way that will help to facilitate future multilateral agreement

using regional variation in wages to measure the effects of the federal minimum wage the imposition of a national minimum wage standard provides a natural experiment in which the treatment effect varies across states depending on the fraction of workers initially earning less than the new minimum the author exploits this fact to evaluate the effect of the april 1990 increase in the federal minimum wage on teenagers wages employment and school enrollment comparisons of grouped and individual state data confirm that the rise in the minimum wage increased teenagers wages there is no evidence of corresponding losses in teenage employment or changes in teenage school enrollment

minimum wages labor market institutions and female employment a cross country analysis the authors investigate the employment consequences of minimum wage regulation for women in 16 oecd countries during 1970 to 2008 the treatment follows that of neumark and wascher s 2004 cross c

employment effects of minimum and subminimum wages panel data on state minimum wage laws using panel data on state minimum wage laws and economic conditions for the years 1973 89 the authors reevaluate existing evidence on the effects of a minimum wage on employment their estimates indicate that a 10 increase in the minimum wage causes a decline of 1 2 in employment among teenagers and a decline of 1 5 2 in employment for young adults similar to the ranges suggested by earlier time series studies the authors also find evidence that youth subminimum wage provisions enacted by state legislatures moderate the disemployment effects of minimum wages on teenagers

do migrants improve governance at home evidence from a voting experiment can international migration promote better institutions at home by raising the demand for political accountability a behavioral measure of the population s desire for better governance was designed to examine this question a postcard was distributed to households promising that if enough postcards were mailed back results from a survey module on perceived corruption would be published in the national media data from a tailored household survey were used to examine the determinants of this behavioral measure of demand for political accountability undertaking the costly action of mailing the postcard and to isolate the positive effect of international emigration using locality level variation the estimated effects are robust to the use of instrumental variables including past migration and macro shocks in the destination countries the estimated effects can be attributed mainly to migrants who immigrated to countries with better governance especially migrants who return home

a historical review of promotion strategies for electricity from renewable energy sources in eu countries abstract the core objective of this paper is to elaborate on historically implemented promotion strategies of renewable energy sources and the associated deployment within the european electricity market hence at a first glance the historic development of renewable energy sources in the electricity res e sector is addressed on member state and on sectoral level as well as consequently discussed according to available res e potentials and costs the specific focus of this paper are promotion strategies for res e options as they are the key driver of an efficient and effective res e deployment therefore the paper depicts the main types of different promotion schemes and their properties additionally several cases studies of different european member states show an in depth analysis of the different res e promotion schemes in this context special emphasises are put on the question of effective and efficient promotion scheme designs of different res e technologies generally conducted research led to the conclusion that technology specific financial support measures of res e performed much more effective and efficient than others did hence it is not all about the common question of feed in tariffs vs quota systems based on tradable green certificates but more about the design criteria of implemented res e support schemes

out of sight not out of mind education networks and international trade summary university students typically develop between them long lasting ties of friendship and trust as well as an attachment to their university if they are foreign students they also form a bond to their country of study this paper investigates the impact of university ties on the uk s trade with 167 countries during 1999 2009 i find robust evidence that education network ties boost the uk s bilateral trade flows specifically the impact of networks is stronger on trade between the united kingdom and countries with dissimilar institutions and culture and particularly with post communist economies results are robust to different econometric specifications and regressors

immigrant remittances and the venture investment environment of developing countries despite the increasing importance of financial and social remittances to developing countries their impact on home country venture investing environments has been largely overlooked i develop a framework grounded in transaction costs economics and social knowledge theories to investigate relationships between remittances and home country 1 capital availability 2 new business creation and 3 economic internationalization my framework also accounts for individual and collective immigrant attributes that may moderate the impact of remittances on these alternative indicators of the venture investment environment analyses of immigrant remittances to 61 developing countries from 2002 2007 indicate that they increase general and more narrowly defined venture capital availability as well as broader openness to international trade remittances also increase new business start up rates when the developing country s public sector is sufficiently small positive venture funding effects of remittances are magnified when coming from immigrants living in highly concentrated communities but are diminished when coming from highly educated immigrants overall results suggest that developing country immigrants of varying backgrounds play an important role in venture funding founding and integration with the world economy

getting handcuffs on an octopus theoretical work on minimum wage policy emphasizes labor market dynamics but the resulting implications for worker mobility remain largely untested the authors show that in the teenage labor market higher minimum wage standards reduce worker flows and increase job stability furthermore they find that the employment effects of a relatively higher minimum wage vary considerably across markets with different levels of turnover and labor market tightness results help to explain the small effects of minimum wage standards on employment commonly found in the aggregate data and are consistent with labor market models that involve search frictions

industrial groupings and foreign direct investment we explore worldwide foreign direct investment location decisions by japanese manufacturing firms from 1985 through 1991 our conditional logit estimates provide evidence that firms location decisions are affected by membership in either vertical or horizontal keiretsu consistent with previous studies that stress agglomeration effects on firms location decisions we find that the stock of investment in a region by a firm s vertical keiretsu partners increases the probability of location further we find that the recent flow of investment into a region by a firm s horizontal keiretsu partners increases the probability of investment to the region providing evidence of networking effects

immigration and the diffusion of technology the huguenot diaspora in prussia abstract this paper analyzes long term effects of skilled worker immigration on productivity for the huguenot migration to prussia in 1685 religiously persecuted french huguenots settled in brandenburg prussia and compensated for population losses due to plagues during the thirty years war we combine huguenot immigration lists from 1700 with prussian firm level data on the value of inputs and outputs in 1802 in a unique database to analyze the effects of skilled immigration to places with underused economic potential exploiting this settlement pattern in an instrumental variable approach we find substantial long term effects of huguenot settlement on the productivity of textile manufactories jel j24 j61 l67 n33 n63 o33 o47

the causal impact of migration on us trade evidence from political refugees immigrants can increase international trade by shifting preferences towards the goods of their country of origin and by reducing bilateral transaction costs using geographical variation across u s states for the period 2008 to 2013 i estimate the respective causal impact of immigrants on u s exports and imports

linguistic distance as a determinant of bilateral trade we introduce a measure of language difficulty called linguistic distance into a modified gravity model to determine whether a language being further away from english affects the level of trade our sample of 36 non english speaking countries includes japan and south korea which we argue are special cases because of world war ii the korean war and subsequent close political and economic ties with the united states presence of a stock of immigrants in the home country has been shown to enhance trade with the country of origin controlling for immigrant network and information attributes the special relationship with japan and korea and the standard gravity model variables we find that trade will be less between the united states and a country the further that country s language is from english these results hold for aggregate exports and imports and for exports and imports of consumer and producer manufactures

can beer taxes affect teen pregnancy evidence based on teen abortion rates and birth rates economists have investigated the effects of increased alcohol taxes on various alcohol related phenomena like traffic fatalities but to my knowledge this study is the first to investigate the effects of beer taxes on teen pregnancy outcomes namely abortion and birth rates the study employs statelevel data for 15 19 year old women for the years 1985 1988 1992 and 1996 the smallness of the panel imposes some constraints on the statistical methods used results indicate that higher beer taxes have statistically significant negative effects on teen abortion rates though the magnitudes of the effects are quite small effects on birthrates are statistically insignificant this suggests that increased beer taxes may help prevent some unwanted pregnancies that would typically be terminated via abortions rather than culminating in live births however the small magnitudes of the effects strongly caution against relying on increased beer taxes to noticeably reduce teen pregnancy rates

bridging trade theory and labour econometrics the effects of international migration this paper surveys current theoretical and empirical research on international migration with a particular emphasis on the links between trade theory and labour empirics

foreign direct investment the human dimension this paper argues that fdi is plagued by information asymmetries and moral hazard problems which can be ameliorated by face to face interaction an equilibrium model of fdi indicates that better ability to discriminate among alternative projects in a foreign country through personal contact will increase foreign investment into that country and spur more investment back from that country we examine the relationship between fdi and three proxies for personal interaction distance language and travel we find strong evidence supporting the importance of the human dimension in fdi particularly that associated with travel the direction of influence appears to be of travel on fdi rather than fdi on travel

immigrant links to the home country empirical implications for u s bilateral trade flows immigrants ties to their home countries can play a key role in fostering bilateral trade linkages immigrant ties include knowledge of home country markets language preferences and business contacts that have the potential to decrease trading transaction costs empirical results for the united states suggest that immigrant links have historically been important in increasing bilateral trade flows with immigrants home countries copyright 1994 by mit press

testing the brain gain hypothesis micro evidence from cape verde abstract does emigration really drain human capital accumulation in origin countries this paper explores a unique household survey designed and conducted to answer this research question we analyze the case of cape verde a country with allegedly the highest brain drain in africa despite a marked record of income and human capital growth in recent decades we propose the first explicit test of brain drain arguments according to which the prospects of own future migration can positively impact educational attainment our most conservative estimates using individual specific variation in economic conditions at the destination indicate that a 10 pp increase in the probability of own future migration improves the probability of completing intermediate secondary schooling by nearly 4 pp for individuals who do not migrate before age 16 these findings are robust to the choice of instruments and econometric specification counterfactual simulations point to significant human capital gains from lowering migration barriers

does the chinese diaspora speed up growth in host countries summary we compiled a new enhanced data set on the population share of overseas chinese covering 147 countries over the period 1970 2010 linking the migration and economic growth literature this article attempts to estimate the impact of the chinese diaspora on economic growth in host countries regression results from both barro type and dynamic panel data models suggest that a country s initial relative endowment with overseas chinese is positively related to subsequent growth results are robust to a number of sensitivity tests the effect is transmitted via increased trade openness enhanced investment and general tfp effects

native language spoken language translation and trade we construct new series for common native language and common spoken language for 195 countries which we use together with series for common official language and linguistic proximity in order to draw inferences about 1 the aggregate impact of all linguistic factors on bilateral trade 2 the separate role of ease of communication as distinct from ethnicity and trust and 3 the contribution of translation and interpreters to ease of communication the results show that the impact of linguistic factors all together is at least twice as great as the usual dummy variable for common language resting on official language would say in addition ease of communication plays a distinct role apart from ethnicity and trust and so far as ease of communication enters translation and interpreters are significant finally emigrants have much to do with the role of ethnicity and trust in linguistic influence

brain drain and ldcs growth winners and losers we present an empirical evaluation of the growth e ects of the brain drain for the source countries of migrants using recent us data on migration rates by education levels carrington and detragiache 1998 we nd empirical support for the bene cial brain drain hypothesis in a sample of 50 developing countries at the country level we distinguish between winners and losers among source countries while the number of winners is smaller these include nearly 80 of the total population of developing countries jel classi cation f22 j24 o15

brain drain in globalization a general equilibrium analysis from the sending countries perspective according to the economic literature high skilled emigration may either harm or bene t developing economies recent research highlighted several positive and negative channels through which the brain drain operates this paper aims at evaluating the relative magnitudes of various brain drain channels and quantifying their global impact on migrants sending countries for this purpose we develop a 10 region general equilibrium model of the world economy characterized by overlapping generations dynamics our ndings suggest that the short run impact of brain drain on resident human capital is extremely crucial as it affects not only the number of high skilled workers available to domestic production but also the sending economy s capacity to innovate adopt modern technologies this latter effect is particularly important in globalization where capital investments are made in places with high production ef ciencies hence despite positive feedback effects those countries facing prevalent high skilled emigration are the most candid victims to brain drain

the optimal migration duration and activity choice after re migration if migrants return to their origin countries two questions arise which are of immediate economic interest for both immigration and emigration country what determines their optimal migration duration and what are the activities migrants choose after a return little research has been devoted to these two issues this paper utilises a unique survey data set which records activities of returned migrants we first illustrate the activities of immigrants after returning we show that more than half of the returning migrants are economically active after return and most of them engage in entrepreneurial activities we then develop a model where migrants decide simultaneously about the optimal migration duration and their after return activities guided by this model we specify and estimate an empirical model where the after return activity and the optimal migration duration are simultaneously chosen

state level estimates of minimum wage effects research using state level data to estimate minimum wage effects on employment follows the textbook treatment of minimum wages assuming that minimum wages are binding and that labor markets are competitive we present an alternative method of estimating minimum wage effects using similar data that relaxes these assumptions using a disequilibrium approach applying this approach to the data and sample period used in many earlier state level studies suggests that simple state level reduced form estimates of minimum wage effects on employment depend on the sample used and may badly understate the disemployment effects of a binding minimum wage

immigration and firms integration in international production networks abstract this paper uses panel data on cross border migration and transaction level trade for swiss municipalities to identify the effect of migration networks on specific margins of the integration of firms in global value chains we find that the stability of an international supplier buyer relationship is strongly associated with a priori knowledge about the supplier s origin as measured by the migrant network with the same country of origin present in the buyer s immediate environment here a municipality not only do firms engage in more stable input trading relationships and intensify relationships in terms of input trading volume but they reduce the total number of suppliers in a given country in response to an increase of immigration from there these results are in line with a theoretical framework where firms sourcing strategies are subject to incomplete information firms diversify their foreign supplier network in order to be less susceptible to potential bad shocks once informational barriers are lifted firms contract fewer suppliers but purchase a larger volume from each of them

the trade creating effects of business and social networks evidence from france using theory grounded estimations of trade flow equations this paper investigates the role that business and social networks play in shaping trade between french regions the bilateral intensity of networks is quantified using the financial structure and location of french firms and bilateral stocks of migrants compared to a situation without networks migrants are shown to double bilateral trade flows while networks of firms multiply trade flows by as much as four in some specifications finally taking network effects into account divides the estimation of the impact of transport costs and of the effect of administrative borders by around three

getting the properties right to secure property rights dixit s lawlessness and economics this is a review article of lawlessness and economics alternative modes of governance princeton university press 2004 by avinash k dixit

international migration remittances and household investment evidence from philippine migrants exchange rate shocks how do households respond to overseas members economic shocks overseas filipinos in dozens of countries experienced sudden heterogeneous changes in exchange rates during the 1997 asian financial crisis appreciation of a migrant s currency against the philippine peso leads to increases in household remittances from overseas the estimated elasticity of philippine peso remittances with respect to the exchange rate is 0 60 positive migrant shocks lead to enhanced human capital accumulation and entrepreneurship in origin households child schooling and educational expenditure rise while child labour falls households also work more hours in self employment and become more likely to start relatively capital intensive household enterprises

minimum wage laws are they overrated l minimum has been fixed in nominal terms at about 55 percent of the current average wage rising wages in the rest of the economy gradually erode the real minimum wage and eventually the process is repeated sometimes the increase in the nominal minimum is accompanied by a permanent reduction in those businesses exempted from the law proposals for a lower minimum wage for young workers or to index the minimum wage to the average wage have been debated but not adopted the minimum wage was last increased to 3 35 in 1981 since then average hourly wages have risen by 25 percent eliminating any momentum for a lower minimum wage for youth but reviving proposals for another increase in the nominal minimum economists are fascinated by the minimum wage because we have strong theoretical predictions about the direction of the effect of the minimum wage on employment and fairly widely accepted methods to estimate the size of that impact it probably didn t hurt that the earliest and later estimates lined up well with the predictions but that is not the only reason for our fascination with the topic depending on whether we include those who say they earn less than the minimum wage minimum wage workers account for 6 to 12 percent of those employed gilroy 1981 p 157 and less than 5 percent of wage and salary income the minimum wage gives economists a relatively rare opportunity to study the impact of an exogenous increase in the price of labor and thus a chance to refine our thinking

isolating the network effect of immigrants on trade within the migration trade nexus literature this paper proposes a more carefully defined measure of migration business networks and quantifies its impact on bilateral trade using cross sectional data and controlling for the overall bilateral stock of migrants the share of migrants employed in managerial business related occupations has a strong additional effect on trade those immigrants should be the ones directly involved in the diffusion and transmission of information relevant for companies trading with other countries their presence is found to increase the volume of trade especially of imports beyond the already known effect of immigrants or highly educated immigrants when we control for the presence of highly educated immigrants the share of immigrants in business network occupations shows a particularly large effect on trade in differentiated goods we also find that highly educated individuals in business related occupations are those contributing to stimulate import and export by the largest margin business network effects seem particularly important in stimulating exports to culturally different countries such as those with different language and legal origin

the trade facilitation impact of the chinese diaspora using an enhanced data set on the population share of overseas chinese in 1970 and 1990 this paper analyses the impact of the chinese diaspora on facilitating china s bilateral trade during the period 1973 2013 our findings suggest substantial trade creation effects resulting from the presence of ethnic chinese in the trade partner population diaspora impacts on chinese bilateral imports are in general higher than those found for exports coethnic networks play a larger role as long as the partner country does not have an rta with china in place among export sectors effects found were strongest for food as well as for machinery and transport equipment in regard to imports coethnic networks matter mostly for raw materials machinery and transport equipment and chemicals

does trade creation by social and business networks hold in services recent literature on the border effect has shown that the intensity of trade in goods is positively correlated with the migration stocks between any pair of countries regions the number of references for business networks is more limited but they are also related with a reduction on information costs in this article we investigate whether such a relation holds also for spanish domestic trade flows in consumer services to this end we use a gravity model rooted in the dixit stiglitz krugman theoretical framework and a unique data set on interregional trade flows for some of the main tourism service sectors namely accommodations and restaurants our industry specific analysis finds a large positive effect for restaurants but a more limited effect for accommodations forces driving the demand in each sector explain this result and suggest the idea that although social networks can act as a substitute of firms in some sectors at the same time they can enhance trade flows in other sectors we perform the

the pecking order of cross border investment abstract is there a pecking order of cross border investment in that countries become financially integrated through some types of investment rather than others using a novel database of bilateral capital stocks for all types of investment fdi portfolio equity securities debt securities as well as loans for a broad set of 77 countries we show that such a pecking order indeed exists the paper focuses on two key determinants of this pecking order information frictions and the quality of host country institutions overall we find that in particular fdi and to some extent also loans are substantially more sensitive to information frictions than investment in portfolio equity and debt securities we also show that the share as well as the size of fdi that a country receive are largely insensitive to institutional factors in host countries while portfolio investment is by far the most sensitive to the quality of institutions this provides new evidence in favor of some hypotheses but contradicts others put forward in the literature on trade in financial assets

can parental migration reduce petty corruption in education the income generated from parental migration can increase funds available for children s education in countries where informal payments to teachers are common migration could therefore increase petty corruption in education this hypothesis is tested by investigating the effect of migration on educational inputs an instrumental variables approach is used on survey data and matched administrative records from the world bank s open budget initiative boost from moldova one of the countries with the highest emigration rates contrary to the positive income effect the strongest migration related response in private education expenditure that is found is a substantial decrease in informal payments to public school teachers any positive income effect due to migration must hence be overcompensated by some payment reducing effects a number of potential explanations at the family level school level or community level are discussed several of these explanations ruled out and possible interpretations for future research highlighted

a generalized design for bilateral trade flow models abstract this paper suggests a full interaction effects design to analyze bilateral trade flows this is illustrated with an unbalanced panel of bilateral trade between the triad eu15 usa and japan economies and their 57 most important trading partners over the period 1986 1997 our full interaction model finds empirical support for the new trade theory and linder s hypothesis we show that the omission of one or more interaction effects can result in biased estimates and misleading inference

international migration remittances and schooling evidence from el salvador abstract we examine the effect of remittances from abroad on households schooling decisions using data for el salvador following the massive war related emigration of the 1980s remittances became a significant source of household income throughout the 1990s we use the cox proportional hazard model to examine the determinants of school attendance measuring income from a source that is uncorrelated with parental schooling remittances we find that remittances have a large significant effect on school retention we estimate that while household income net of remittances has a small though significant impact on the hazard of leaving school in rural and urban areas remittances have a much larger impact on the hazard of leaving school in urban areas the effect of remittances is at its smallest 10 times the size of the effect of other income in rural areas the effect of remittances is about 2 6 times that of other income our finding is of interest in that it suggests that subsidizing school attendance particularly in poor areas may have a large impact on school attendance and retention even if parents have low levels of schooling

the impact of policy consistency on technological competitiveness a study on oecd countries abstract this study investigates the impact of policy consistency on technological competitiveness using patent citation analysis policy support plays a key role in promoting firms investment in research and development r d activities especially in emerging sectors policy consistency increases technological competitiveness since it encourages firms to invest in r d activities although previous studies argue policy design and characteristics few deal with policy consistency and they lack a quantitative measure of policy consistency and explanation of its effects therefore this study proposes the quantitative indexes for policy consistency and potential technological competitiveness the indexes are applied to the case of renewable energy sector since energy sector is highly dependent on the government policy and thus needs high policy consistency the result shows that renewable energy technology development is affected by policy and the higher the policy consistency especially in emerging sectors it also shows that countries of high policy consistency tend to achieve higher technological competitiveness and thus are likely to secure higher technological competitiveness in the future the findings of this study can be used in designing policy for sustainable technological competitiveness and will be a corner stone for researches on assessing policy consistency

anonymous market and group ties in international trade abstract history provides many examples of cohesive groups dispersed over several countries who exploit the ties between their members to gain entry into foreign markets the phenomenon is well established empirically and noteworthy because it suggests the importance of informational barriers in international transactions we present a simple model where output is produced through a joint venture and agents have complete information domestically but are unable to judge the quality of their match abroad a minority of individuals otherwise identical to all others can exploit complete information in international matches between group members if they so choose group ties increase aggregate trade and income but hurt the anonymous market because they deprive it disproportionately of the group s more productive members

efficiency gains from liberalizing labor mobility in this paper we quantify the effect of a complete liberalization of cross border migration on the world gdp and its distribution across regions we build a general equilibrium model endogenizing bilateral migration and income disparities between and within countries our calibration strategy uses data on effective and potential migration to identify total migration costs and visa costs by education level data on potential migration reveal that the number of people in the world who have a desire to migrate is around 400 million this number is much smaller than that predicted in previous studies and reflects the existence of high incompressible migration costs in our benchmark framework liberalizing migration increases the world gdp by 11 5 12 5 percent in the medium term our robustness analysis reveals that the gains are always limited in the range of 7 0 percent with schooling externalities to 17 9 percent if network effects are accounted for

why is south korea s renewable energy policy failing a qualitative evaluation abstract this study explores the causes of the south korean government s failure to successfully deploy its renewable energy policy despite the south korean government s ongoing efforts since 2002 to promote the deployment of renewable energy the established deployment target has not been met and the share of renewable energy supply in total primary energy supply is poor compared to peer countries with a similar level of economic development therefore we attempt to find the causes of this policy failure using qualitative evaluation methods through the analyses conducted using focused interviews and secondary data we found that the domination of the fossil fuel and nuclear power industry s interests inconsistent policy shifts policy design that lacks sufficient support schemes poorly coordinated government activities and unsystemic and untimely monitoring and feedback have led to the failure of renewable energy deployment policies in south korea to overcome these problems we suggest that the south korean government should set more ambitious policy goals establish a new independent organization that focuses on energy policy issues use a varied policy mix and secure political support from diverse policy actors

learning from experience the development of the renewables obligation in england and wales 2002 2010 abstract the uk has enviable renewable resources both onshore wind and offshore wind wave and tidal the offshore valuation group 2010 the government has had policy mechanisms in place since 1990 to encourage these resources to be developed the current mechanism the renewables obligation ro was specifically designed to emphasise competition and therefore to fit in with the uk s overall strategic approach to energy policy however as yet it has not delivered the capacity that it was designed to do and as a result the uk faces a difficult challenge in attempting to meet european wide renewable energy targets for 2020 as well as longer term decarbonisation targets this paper explores some of the major reasons why the ro has performed so poorly to date and considers the prospects for improvement up to 2020 it concludes that the strategic emphasis on competition in the support mechanisms has played a key role in limiting renewables development but that the mechanism has changed significantly since it was introduced however these changes together with proposals for electricity market reform still do not address important elements of risk in comparison with a standard feed in tariff

decentralized international exchange traditional models of international trade take place within trading environments in which trade is coordinated by a walrasian auctioneer who instantly matches buyers and sellers in world markets this assertion seems inconsistent with evidence suggesting that trading arrangements seem to economize on transactions costs associated with international trade recognizing these insights we depart from standard models of international trade by incorporating the difficulties in the coordination of exchange within a two country random matching model of international trade we capture a motivation for trade through comparative advantage and interpret trade across economies to be associated with an agent s endogenous choice to participate in foreign markets although an individual may decide to search abroad to obtain additional gains from trade resulting from comparative advantage she is less likely to meet trading partners abroad as search frictions are higher in the foreign country than in the domestic market using this framework we show that international trade is associated with convergence in relative prices across countries we also show that the extent of market frictions in the foreign country affects relative prices the volume of international trade and welfare levels due to market participation externalities associated with international trade we show that a movement from autarky to free trade may actually lower welfare levels we conclude by examining the possible inefficiencies associated with international trade due to the decentralized nature of exchange and the policy implications of our model

social ties and foreign market entry the social dynamics which precede international exchange are considered in light of data collected on 133 foreign market entries from a sample of highly internationalized manufacturing firms consistent with research done in the social network field the findings support the hypothesis that knowledge of foreign market opportunities is commonly acquired via existing inter personal links rather than collected systematically via market research this study thus contributes towards an understanding of those antecedent conditions that lead to the formation of export exchange relationships

state renewable energy electricity policies an empirical evaluation of effectiveness over the past decade state governments have emerged as us energy policy leaders across the country states are adopting policy instruments aimed at carbon mitigation and renewable energy deployment one of the most prevalent and innovative policy instruments is a renewable portfolio standard rps which seeks to increase the share of renewable energy electrification in the electricity market this analysis evaluates the effectiveness of state energy programs with an empirical investigation of the linkage between state rps policy implementation and the percentage of renewable energy electricity generation across states we use a variant of a standard fixed effects model referred to as a fixed effects vector decomposition with state level data from 1998 to 2006 results indicate that rps implementation is not a significant predictor of the percentage of renewable energy generation out of the total generation mix yet for each additional year that a state has an rps policy they are found to increase the total amount of renewable energy generation these findings reveal a potentially significant shortcoming of rps policies political institutions natural resource endowments deregulation gross state product per capita electricity use per person electricity price and the presence of regional rps policies are also found to be significantly related to renewable energy deployment

search and deliberation in international exchange microfoundations to some macro patterns in this era of globalization how do we explain the home bias unexpectedly large distance effects and lagged adjustment patterns visible in international exchange in this paper i argue that in the real world the identity and reliability of potential exchange partners are seldom the data that most economists take them to be in fact firms confront formidable problems of search and deliberation in these circumstances firms social networks can provide a key recourse yet for historical reasons most firms social networks still tend to be local or national and absent institutional solutions even in the face of apparent cross border economic opportunities firms responses appear overly sticky and lagged i explore these arguments in an empirical study that contrasts multinational and domestic firms trade responses to changes in real exchange rates

familiarity breeds investment diaspora networks and international investment what explains cross national patterns of international portfolio and foreign direct investment fdi while existing explanations focus on the credibility of a policy maker s commitment we emphasize the role of diaspora networks we hypothesize that diaspora networks connections between migrants residing in investing countries and their home country influence global investment by reducing transaction and information costs this hypothesis is tested using dyadic cross sectional data for both portfolio and fdi the findings indicate that even after controlling for a multitude of factors disapora networks have both a substantively significant effect and a statistically significant effect on cross border investment

emigration and democracy migration is an important yet neglected determinant of institutions this paper documents the channels through which emigration affects home country institutions and considers dynamic panel regressions for a large sample of developing countries the authors find that emigration and human capital both increase democracy and economic freedom this implies that unskilled skilled emigration has a positive ambiguous impact on institutional quality simulations show an impact of skilled emigration that is generally positive significant for a few countries and for many countries once incentive effects of emigration on human capital formation are accounted for

can energy price regulations smooth price fluctuations evidence from china s coal sector abstract due to the dominance of coal in china s energy mix coal prices have always been a challenging part of pricing reform the recent frequent government interventions raise the key research questions what is the actual impact of price policies on coal price fluctuations and how can forward looking pricing policies be made by proposing a novel classification of coal pricing policies and introducing an expectation and forward looking coefficient the paper examines the relationship between coal price fluctuations and pricing policies using the generalized method of moments gmm method it shows that the lagging coal price and coal demand play a positive role in regulating coal prices while coal supply and marketization have significantly negative effects on coal price fluctuations the heterogeneous impacts of price policies are due to differences in market players expectations policy instruments and the methods of policy release in addition china s coal pricing policy portfolio from 2013 to 2016 exerted synergy effects on the restraint of coal price fluctuations as the forward looking coefficient was considerably low the government s intervention behaviors were obviously biased towards ex post facto responses the paper suggests short run and long run policies to advance marketization of coal prices amid the energy transition

the employment effect in retail trade of california s 1988 minimum wage increase in this article we study the labor market effect of california s 1988 minimum wage increase in the retail trade industry two different approaches to evaluating the minimum wage effects suggest that the textbook economic analysis of minimum wages pertains employment growth in california s low wage retail trade sector appears to have been tempered by the minimum wage increase

the impact of mandated employment verification systems on state level employment by foreign affiliates faced with diminishing prospects for a comprehensive immigration reform at the federal level states have started to take immigration matters into their own hands for example many states have been mandating the use of employment verification e verify systems to confirm work eligibility some of the consequences of these e verify mandates remain unclear in this article we focus on the effect of anti illegal immigrant laws on foreign investment specifically we exploit the state level and time variation in the enactment and implementation of e verify mandates to explore if punitive measures against the firm impact states ability to attract foreign direct investment fdi we quantify fdi through the employment by u s affiliates owned by foreign firms our results suggest that e verify mandates adversely affect employment among these majority owned u s affiliates and therefore work against states trying to attract fdi

revisiting the minimum wage employment debate throwing out the baby with the bathwater we revisit the minimum wage employment debate which is as old as the department of labor in particular we assess new studies claiming that the standard panel data approach used in much of the new minimum wage research is flawed because it fails to account for spatial heterogeneity these new studies use research designs intended to control for this heterogeneity and conclude that minimum wages in the united states have not reduced employment we explore the ability of these research designs to isolate reliable identifying information and test the untested assumptions in this new research about the construction of better control groups our evidence points to serious problems with these research designs we conclude that the evidence still shows that minimum wages pose a tradeoff of higher wages for some against job losses for others and that policymakers need to bear this tradeoff in mind when making decisions about increasing the minimum wage

are international trade and factor mobility substitutes abstract this paper analyzes whether factor flows and commodity trade are substitutes or complements i e whether increasing the level of one impacts adversely or favorably on the volume of the other it derives with the aid of a new general equilibrium framework of the world which allows possible differences in factor endowments tastes and technologies across the two trading countries the necessary and sufficient condition for substitutability and complementarity the results are then further examined in two special cases a survey of different concepts of substitutability and complementarity which have appeared in the literature is also given

migrants ancestors and foreign investments we use 130 years of data on historical migrations to the u s to show a causal effect of the ancestry composition of u s counties on foreign direct investment fdi sent and received by local firms to isolate the causal effect of ancestry on fdi we build a simple reduced form model of migrations migrations from a foreign country to a u s county at a given time depend on 1 a push factor causing emigration from that foreign country to the entire u s and 2 a pull factor causing immigration from all origins into that u s county the interaction between time series variation in origin specific push factors and destination specific pull factors generates quasi random variation in the allocation of migrants across u s counties we find that doubling the number of residents with ancestry from a given foreign country relative to the mean increases the probability that at least one local firm engages in fdi with that country by 4 percentage points we present evidence that this effect is primarily driven by a reduction in information frictions and not by better contract enforcement taste similarities or a convergence in factor endowments

do migrants improve governance at home can international migration promote better institutions at home by raising the demand for political accountability a behavioral measure of the population s desire for better governance was designe

regional effects of the minimum wage on teenage employment previous research on the minimum wage using national level data concludes that the minimum wage has a small effect on the employment of teenagers this paper provides new evidence that there is substantial regional variation in the effect of the minimum wage and in some regions it has a decidedly larger impact on teenage employment than previously measured estimates from a panel data set of the us states suggest that the minimum wage may cause almost a 7 reduction in teenage employment in some regions this results is robust to different econometric specifications and holds whether a relative or real specification of the estimating equation is used

informal barriers and agricultural trade does monetary integration matter eu enlargement and the recent sovereign debt crisis of euro zone countries have revived the debate around the european monetary union emu in this article we ask how informal barriers to agricultural and food trade have changed since the introduction of the common european currency and whether this evolution can be attributed to monetary integration we focus on the foreign trade of the 11 emu founder countries over a nine year period covering the creation of the emu and find a diminishing marginal trade impact of both information and institutional barriers we find a lower level of trade barriers but cannot attribute this outcome to the introduction to the euro

the positive effects of the schengen agreement on european trade enacted in 1985 the schengen agreement is widely heralded as both a symbol and major institutional advancement of the european project by eliminating passport requirements for workers the compact ostensibly produces gains from travel ease of market access and economies of scale yet despite these optimistic predictions scholars know little about the actual effects of schengen on trade we fill this void by identifying why labour mobility should expand the cross country exchange of goods and services and then test our theory with data from europe spanning the period 1980 to 2011 we argue that labour mobility resulting from schengen yields positive effects on trade by increasing demand for foreign goods improving awareness of low cost producers abroad and lowering the risks associated with buying and selling outside the country using the gravity model of trade we show empirically that schengen membership makes european states more robust trading partners

reconciling the pattern of trade with the pattern of migration aspects of the brain drain are considered in a theoretical context the emphasis is on the migration of those with managerial skills between countries with abundant skilled labor and those with abundant unskilled labor the results indicate that countries with abundant skilled labor therefore export managers e g through multinational subsidiaries and skilled labor intensive goods yet import skilled employees the brain drain excerpt

globalization and the dynamics of cultural identity this paper presents a simple model where micro founded dynamics of cultural identity are endogenous and interact with an international trade equilibrium this process generates a strong home bias under autarky we then show that goods market integration causes a phenomenon of cultural divergence whereby the distributions of cultures become more dissimilar across countries and one of the cultures that existed under autarky ultimately disappears by way of contrast we show that social integration causes cultural convergence and can counterbalance the effects of goods market integration

do foreign workers reduce trade barriers microeconomic evidence this paper provides evidence that foreign workers reduce firms trade costs and thus increase the probability that firms export this informs both the literature on trade costs and the microeconomic literature on firms export behaviour we identify the nationality of each worker in a large sample of german establishments and relate this to the exporting behaviour of these establishments we allow for the possible endogeneity of an establishment s workforce by instrumenting the share of foreign workers with the regional distribution of foreign workers in the wider labour market we find a significant effect of worker nationality on exporting which is not driven by the industrial occupational or locational concentration of migrants the effect is much stronger for senior occupations who are more likely to have a role in exporting decisions by the establishment the relationship is also stronger when we consider exports to particular regions and workers from these regions consistent with a gravity model in which trade flows from country i to j are a function of migrants from j in i

comment on david neumark and william wascher employment effects of minimum and subminimum wages panel data on state minimum wage laws in their article published in the minimum wage research symposium in the october 1992 issue of this journal industrial and laborrelations review volume 45 number 1 pp 55 81 david neumark and william wascher claim to find empirical support for three propositions 1 a higher minimum wage leads to a lower teenage employmentpopulation rate 2 the effect of the minimum wage on employment can be seen within a year but becomes stronger after two years and 3 in states with legal subminimum wages a significant fraction of teenage employees are paid a subminimum wage and the availability of a subminimum wage blunts the disemployment effect of the minimum wage the same symposium contains three papers by us that present empirical evidence suggesting conclusions opposite those of neumark and wascher 1 since neumark and