@article{MTMT:34591353, title = {Good enough for outstanding growth. The experience of Bangladesh in comparative perspective}, url = {https://m2.mtmt.hu/api/publication/34591353}, author = {Beyer, Robert C. M. and Wacker, Konstantin M.}, doi = {10.1111/dpr.12750}, journal-iso = {DEV POLICY REV}, journal = {DEVELOPMENT POLICY REVIEW}, volume = {42}, unique-id = {34591353}, issn = {0950-6764}, abstract = {MotivationBangladesh's economic growth rate over the past three decades has been one of the highest in the world. This success is difficult to reconcile with a single macroeconomic explanation of development.PurposePrevious studies have investigated individual aspects that can explain Bangladesh's successful development. But a consistent account of how individual factors contributed to growth is currently missing. Can factors that correlate with growth in other countries explain the outstanding growth performance of Bangladesh? Or is the country's experience unique?Methods and approachWe construct a panel data set for 149 countries since 1970 and combine growth regression techniques with a peer group comparison. Different specifications, subsamples, and estimation techniques are considered.FindingsFactors correlating with growth in other countries can well explain the growth experience of Bangladesh. But two features are specific to the country. First, a combination of "good enough" policies led to considerable growth impulses between 1990 and 2005: the country's improvements in typical correlates of growth during this period were among the global top 5% for any 15-year period investigated. Second, despite the absence of major reforms after 2005, Bangladesh defied the mean reversion in growth rates experienced by most fast-growing economies and peer countries.Policy implicationsOur results support the idea that a combination of "good enough" policies can jump-start high growth in low-income countries. Our findings further demonstrate that a stable macroeconomic and institutional environment helps when it comes to reaping the benefits of structural improvements in the long run.}, keywords = {GROWTH; economic development; INSTITUTIONS; REFORM; Bangladesh}, year = {2024}, eissn = {1467-7679} } @article{MTMT:34591351, title = {Income, democracy and output growth volatility revisited}, url = {https://m2.mtmt.hu/api/publication/34591351}, author = {Pittaluga, Giovanni Battista and Reghezza, Alessio and Seghezza, Elena and Thornton, John}, doi = {10.1080/00036846.2024.2303616}, journal-iso = {APPL ECON}, journal = {APPLIED ECONOMICS}, unique-id = {34591351}, issn = {0003-6846}, abstract = {Economic diversification increases the level of democracy and leads to greater output stability. This is because diversification is associated with an increased share of the population organized into interest groups that compete to pressure governments to pursue policies favouring their particular group. The increase in the share of the population organized in this way is indicative of an increase in the level of democracy. As diversification and the level of democracy (number of interest groups) increases, the government must pursue policies aimed at satisfying the largest number of groups, which limits its scope to implement policies that destabilize output growth. Empirical support for these hypotheses is provided from applying dynamic and heterogeneous panel data estimation techniques to a panel of 117 countries over 1995-2015. The results show a positive and significant relationship between economic diversification and democracy, on the one hand, and between diversification and output stability, on the other hand. Moreover, the positive impact of economic development on democracy and output volatility is conditional on development being accompanied by economic diversification.}, keywords = {INCOME; DEMOCRACY; O43; D72; Economic diversification; H11; Output volatility}, year = {2024}, eissn = {1466-4283} } @article{MTMT:34591357, title = {Can outward FDI promote export diversification for emerging economies? Firm-level evidence from China}, url = {https://m2.mtmt.hu/api/publication/34591357}, author = {Zhang, Song and Chen, Chunlai and Li, Haoze}, doi = {10.1016/j.strueco.2023.10.009}, journal-iso = {STRUCT CHANGE ECON DYNAM}, journal = {STRUCTURAL CHANGE AND ECONOMIC DYNAMICS}, volume = {68}, unique-id = {34591357}, issn = {0954-349X}, abstract = {Recent studies have highlighted the importance of export diversification in facilitating emerging economies' structural change and economic development. This study aims at investigating whether outward foreign direct investment (OFDI) can promote export diversification. Using a firm-product-level dataset, this study investigates empirically the impact of China's OFDI conducted by exporting firms on their export diversification both at product-level and destination-level. By employing propensity score matching (PSM) techniques and differences-in-differences (DID) analysis, this study finds that China's OFDI has a positive and statistically significant impact on promoting China's diversification of export basket, and the promotion effects vary upon different motivations of OFDI. A dynamic effect test shows that the promotion effects of OFDI are significant for several consecutive years after outward investment was made. In addition, this study also finds that the promotion effects mainly come from optimised organisational structure and improved business performance of the OFDI firms.}, keywords = {TRADE; Emerging economies; Export diversification; Outward foreign direct investment}, year = {2024}, eissn = {1873-6017}, pages = {269-280} } @article{MTMT:33860541, title = {Bankruptcy costs, idiosyncratic risk, and long-run growth}, url = {https://m2.mtmt.hu/api/publication/33860541}, author = {Acosta-Ormaechea, Santiago and Morozumi, Atsuyoshi}, doi = {10.1017/S1365100522000475}, journal-iso = {MACROECON DYN}, journal = {MACROECONOMIC DYNAMICS}, volume = {27}, unique-id = {33860541}, issn = {1365-1005}, abstract = {This paper analyzes how idiosyncratic risk, measured by the variance of firm-level idiosyncratic shocks, affects long-run growth when bankruptcy costs are present. These costs are incurred by creditors during the bankruptcy procedure of failing firms. In an endogenous growth model with bankruptcy costs where firms privately observe the outcome of idiosyncratic shocks, an increase in idiosyncratic risk reduces long-run growth. This happens because, when bankruptcy costs are present, higher idiosyncratic risk enlarges the wedge between the rental rate of capital and its marginal product, thereby slowing down capital accumulation. This growth-reducing effect of idiosyncratic risk is stronger when bankruptcy costs are higher. Empirical support for these propositions is provided in a growth regression that exploits cross-country variations in the dispersion of firms' real sales growth as a proxy for idiosyncratic risk along with recovery rates as a measure that proxies the inverse of bankruptcy costs.}, keywords = {Endogenous growth model; firm-level data; idiosyncratic risk; Bankruptcy Costs}, year = {2023}, eissn = {1469-8056}, pages = {1807-1842} } @article{MTMT:32955087, title = {Oil, export diversification and economic growth in Sudan. evidence from a VAR model}, url = {https://m2.mtmt.hu/api/publication/32955087}, author = {Ali, Sabna and Murshed, Syed Mansoob and Papyrakis, Elissaios}, doi = {10.1007/s13563-022-00310-w}, journal-iso = {Mineral Economics}, journal = {Mineral Economics}, volume = {36}, unique-id = {32955087}, issn = {2191-2203}, abstract = {There is an extensive literature demonstrating a positive link between export diversification and economic growth. In parallel, the resource curse thesis posits export concentration as an important mechanism curtailing growth in mineral-rich countries. Our analysis contributes to this literature by empirically investigating the interaction between oil dependence captured by the share of oil rents in GDP and export diversification and economic growth for Sudan. We do this with the help of a VAR model using annual data between 1960 and 2018. In comparison to earlier studies, our dataset covers also Sudan's post-oil boom period, which coincided with a substantial drop in oil dependence after the 2011 secession of South Sudan. We find that oil rents appear to have a statistically significant and negative effect on export diversification, although contemporaneously rather than in the long-term. However, we find no evidence of a statistically significant impact of either oil dependence or export diversification on economic growth, as suggested by the resource curse hypothesis.}, keywords = {OIL; Sudan; resource curse; Export diversification; Vector Autoregressive Model}, year = {2023}, pages = {77-96}, orcid-numbers = {Murshed, Syed Mansoob/0000-0002-8360-033X} } @article{MTMT:34250053, title = {Geopolitical risk and crowdfunding performance}, url = {https://m2.mtmt.hu/api/publication/34250053}, author = {Alsagr, Naif and Cumming, Douglas J. and Davis, Justin G. and Sewaid, Ahmed}, doi = {10.1016/j.intfin.2023.101766}, journal-iso = {J INT FINANC MARK I}, journal = {JOURNAL OF INTERNATIONAL FINANCIAL MARKETS INSTITUTIONS & MONEY}, volume = {85}, unique-id = {34250053}, issn = {1042-4431}, abstract = {The most pronounced risk that fund providers assume in rewards-based crowdfunding is reward delivery. Developing markets around the world exhibit geopolitical risks (GPR) that impact the likelihood that the rewards will be delivered. Hence, this points towards a potential association between GPR and the likelihood of successful crowdfunding financing. This paper examines 1,672 fundraising attempts from the 19 developing countries listed in the GPR index. The data indicate that GPR is negatively associated with the likelihood of crowdfunding success. Further, the evidence shows that entrepreneurs can moderate the costs of GPR via signaling and campaign disclosures. Implications for policymakers and entrepreneurs are discussed.}, keywords = {UNCERTAINTY; Crowdfunding; Geopolitical risk}, year = {2023}, eissn = {1873-0612}, orcid-numbers = {Davis, Justin G./0000-0003-3139-1772} } @article{MTMT:32955090, title = {Explaining differences in the returns to R&D in Argentina. the role of contextual factors}, url = {https://m2.mtmt.hu/api/publication/32955090}, author = {Arza, Valeria and Cirera, Xavier and Lopez, Emanuel and Colonna, Agustina}, doi = {10.1080/10438599.2021.2024075}, journal-iso = {ECON INNOVAT NEW TECH}, journal = {ECONOMICS OF INNOVATION AND NEW TECHNOLOGY}, volume = {32}, unique-id = {32955090}, issn = {1043-8599}, abstract = {Argentinean firms' investments in R&D are well below its regional peers. One potential explanation for this fact is the existence of low and heterogeneous returns for these investments. This paper uses novel microdata to estimate the returns to R&D and analyse the role of contextual factors in shaping its heterogeneity. The findings confirm that returns are indeed heterogeneous and depend on some important factors related to the market context, such as measures of uncertainty; and the knowledge context, such as knowledge spillovers. Acknowledging that heterogeneity of returns depends on firms' context is crucial for designing innovation policies to boost private R&D returns.}, keywords = {PRODUCTIVITY; Argentina; R&D; knowledge context; market context}, year = {2023}, eissn = {1476-8364}, pages = {751-782}, orcid-numbers = {Arza, Valeria/0000-0003-4819-1777} } @article{MTMT:32955088, title = {R&D investment under stress and uncertainty. the case of Argentina}, url = {https://m2.mtmt.hu/api/publication/32955088}, author = {Arza, Valeria and Nieri, Federica and Giuliani, Elisa}, doi = {10.1080/2157930X.2022.2049124}, journal-iso = {INNOV DEVEL}, journal = {INNOVATION AND DEVELOPMENT}, volume = {13}, unique-id = {32955088}, issn = {2157-930X}, abstract = {Firms in developing economies are subject to macroeconomic fluctuations and policy swings, which generate uncertainty about the future behaviour of key variables that condition their return to innovation. In this paper, we explore how macroeconomic uncertainty and past exposure to macroeconomic shocks affect R&D investments. Using firm-level data on Argentina for the period 1992-2001, we find that firms that have experienced more shocks are less likely to commit to R&D investment and, also, that macroeconomic uncertainty prevents firms' investment in R&D. We find that this effect is stronger for firms that have experienced more macroeconomic-shocks and weaker for firms with higher levels of foreign ownership.}, keywords = {Argentina; Developing Countries; Foreign Direct Investment (FDI); R&D investment; Macroeconomic uncertainty; experience of shocks}, year = {2023}, eissn = {2157-9318}, pages = {441-469}, orcid-numbers = {Arza, Valeria/0000-0003-4819-1777; Nieri, Federica/0000-0002-6027-5933; Giuliani, Elisa/0000-0002-3813-1861} } @article{MTMT:34591352, title = {Anger impairs strategic behavior: A Beauty-Contest based analysis}, url = {https://m2.mtmt.hu/api/publication/34591352}, author = {Castagnetti, Alessandro and Proto, Eugenio and Sofianos, Andis}, doi = {10.1016/j.jebo.2023.06.027}, journal-iso = {J ECON BEHAV ORGAN}, journal = {JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION}, volume = {213}, unique-id = {34591352}, issn = {0167-2681}, abstract = {The frustration-aggression hypothesis posits that anger affects economic behaviour essentially by temporally changing individual social preferences and specifically attitudes towards punishment. Here, we test a different channel in an experiment where we externally induce anger to a sub-group of participants (following a standard procedure that we verify by using a novel method of textual analysis). We show that anger can impair the capacity to think strategically in a beauty -contest game, in a pre-registered experiment. Angry participants choose numbers further away from the best response level and earn significantly lower profits. Using a finite mixture model, we show that anger increases the number of level-zero players by 9 percentage points, a percentage increase of more than 30%. Furthermore, with a second pre-registered experiment, we show that this effect is not common to all negative emotions. Sad participants do not play significantly further away from the best response level than the control group and sadness does not lead to more level-zero play.}, keywords = {ANGER; Strategic interactions; induced emotions; Beauty -contest}, year = {2023}, eissn = {1879-1751}, pages = {128-141}, orcid-numbers = {Proto, Eugenio/0000-0001-7766-6503; Sofianos, Andis/0000-0002-4479-9139} } @article{MTMT:32955081, title = {Uncertainty before and during COVID-19. A survey}, url = {https://m2.mtmt.hu/api/publication/32955081}, author = {Castelnuovo, Efrem}, doi = {10.1111/joes.12515}, journal-iso = {J ECON SURV}, journal = {JOURNAL OF ECONOMIC SURVEYS}, volume = {37}, unique-id = {32955081}, issn = {0950-0804}, abstract = {This survey features three parts. The first one reviews the most recent literature on the relationship between domestic (i.e., country-specific) uncertainty and the business cycle, and offers ten main takeaways. The second part surveys contributions to the fast-growing strand of the literature that focuses on the macroeconomic effects of uncertainty spillovers and global uncertainty. The last part presents contributions on the role played by uncertainty during the COVID-19 pandemic.}, keywords = {UNCERTAINTY; spillovers; Business Cycle; Global uncertainty; COVID-19; global output}, year = {2023}, eissn = {1467-6419}, pages = {821-864} } @article{MTMT:33173615, title = {Terms of trade during the first globalization. new evidence, new results}, url = {https://m2.mtmt.hu/api/publication/33173615}, author = {Chilosi, David and Federico, Giovanni and Tena-Junguito, Antonio}, doi = {10.1093/ereh/heac012}, journal-iso = {EUR REV ECON HIST}, journal = {EUROPEAN REVIEW OF ECONOMIC HISTORY}, volume = {27}, unique-id = {33173615}, issn = {1361-4916}, abstract = {By analyzing a new dataset of terms of trade covering the whole world during the "first globalization" (1800-1913), this article finds that trends of terms of trade varied significantly, both within the periphery and the core, and were mainly driven by import prices. Volatility declined because price spikes became less frequent and export prices became increasingly stable. We find little evidence of de-industrialization. Consistent with our trends, prices of primary products, similarly to those of manufactures, were falling and so was their volatility. These results sit uneasily with the view that terms of trade played a crucial role in holding back the development of peripheral countries before World War I.}, year = {2023}, eissn = {1474-0044}, pages = {91-122}, orcid-numbers = {Chilosi, David/0000-0002-2251-0381} } @article{MTMT:34591358, title = {Unveiling the influence of economic complexity and economic shocks on output growth volatility. evidence from a global sample}, url = {https://m2.mtmt.hu/api/publication/34591358}, author = {Chu, Lan Khanh and Truong, Huong Hoang Diep and Dung, Hoang Phuong}, doi = {10.1007/s40822-023-00246-8}, journal-iso = {EURAS ECON REV}, journal = {EURASIAN ECONOMIC REVIEW}, volume = {13}, unique-id = {34591358}, issn = {1309-422X}, abstract = {While several studies have explored the impact of economic shocks on output volatility, little attention has been given to the role of a country' productive knowledge in moderating such relationship. In this paper, we raise two unsettled questions: Does productive knowledge reduce the volatility of output growth? and Does it magnify or alleviate the impacts of economic shocks on output volatility? These two questions are answered by applying the system-generalized method of moments to a dataset of 122 countries from 1996 to 2019. The paper shows that high economic complexity is significantly associated with reduced output growth volatility. However, such beneficial effect only occurs in high- and upper middle-income countries. Economic complexity is also found to strongly moderate the relationship between terms of trade shock, inflation shock, and output growth volatility. Economic complexity significantly exacerbates the unfavorable effects of these two shocks on output growth volatility, especially in highly complex economies. The discovered inter-related relationship between economic complexity, shocks, and economic volatility suggests the policymakers to be cautious in the process of transforming their economies towards higher knowledge-intensive ones.}, keywords = {economic complexity; economic shock; system GMM; Inflation shock; Output growth volatility; Terms of trade shock}, year = {2023}, eissn = {2147-429X}, pages = {637-676} } @article{MTMT:33860536, title = {Is trade openness a barrier to industrialization? Evidence from Sub-Saharan Africa}, url = {https://m2.mtmt.hu/api/publication/33860536}, author = {Fankem, Gislain Stephane Gandjon and Feyom, Cedric}, doi = {10.1007/s10290-023-00497-2}, journal-iso = {REV WORLD ECON}, journal = {REVIEW OF WORLD ECONOMICS}, unique-id = {33860536}, issn = {1610-2878}, abstract = {The literature on the effect of trade openness on industrialization shows contrasting results. Using a new empirical framework, we contribute in this paper to the removal of this indeterminacy by studying the influence of trade openness on industrialization in a sample of Sub-Saharan African countries. We use the new measure of trade openness and approximate industrialization through three complementary indicators: manufacturing value-added as a percentage of GDP, manufacturing employment as a share of total employment, and the industrial competitiveness index. Estimations are carried out by a two-step system generalized method of moments (GMM). Over the period 1985-2014, our results show that in Sub-Saharan Africa, the level of industrialization is a decreasing function of trade openness. The magnitude of this negative effect is conditioned by very low levels of foreign direct investment and human capital. Our results, which stand up to many robustness checks, seem to support the implications of the infant industry argument.}, keywords = {Sub-Saharan Africa; Industrialization; trade openness}, year = {2023}, eissn = {1610-2886} } @article{MTMT:34591359, title = {Do unilateral trade preferences help reduce poverty in beneficiary countries?}, url = {https://m2.mtmt.hu/api/publication/34591359}, author = {Gnangnon, Sena Kimm}, doi = {10.1007/s42495-022-00102-8}, journal-iso = {IJEPS}, journal = {International Journal of Economic Policy Studies}, volume = {17}, unique-id = {34591359}, issn = {2524-4892}, abstract = {This paper has investigated the utilization of non-reciprocal (or unilateral) trade preferences (NRTPs) provided by QUAD countries on poverty in recipient countries. It uses a panel dataset of 77 beneficiaries of NRTPs over the period of 2002-2019, and considers two main blocks of NRTPs, namely 'Generalized System of Preferences' (GSP) programs and 'other trade preferences programs'. The analysis relies on two main indicators of poverty, i.e., the poverty headcount ratio at $1.90 and the poverty gap at $1.90, but also provides a robustness check using indicators of poverty at $3.20 and $5.50. Empirical findings obtained from the use of the two-step generalized method of moments indicate that over the full sample, an increase in the utilization rates of both GSP programs and other trade preferences programs is associated with poverty reduction in beneficiary countries, with the magnitude of this effect being higher for least developed countries (LDCs) than for other countries in the full sample. In addition, the simultaneous utilization of GSP programs and other trade preferences programs exerts a strong poverty reduction effect in beneficiary countries. Finally, the effect of the utilization of each type of NRTPs on poverty works depends on the beneficiary country's level of economic complexity, and the greater the level of economic complexity, the larger is the poverty reduction effect of the utilization of these NRTPs.}, keywords = {Poverty; O14; F14; F13; Utilization of non-reciprocal trade preferences; QUAD countries; Beneficiary countries}, year = {2023}, eissn = {1881-4387}, pages = {249-288} } @article{MTMT:34250056, title = {Drivers of growth accelerations: What role for capital accumulation?}, url = {https://m2.mtmt.hu/api/publication/34250056}, author = {Koopman, Eline and Wacker, Konstantin M.}, doi = {10.1016/j.worlddev.2023.106297}, journal-iso = {WORLD DEV}, journal = {WORLD DEVELOPMENT: THE MULTI-DISCIPLINARY INTERNATIONAL JOURNAL DEVOTED TO THE STUDY AND PROMOTION OF WORLD DEVELOPMENT}, volume = {169}, unique-id = {34250056}, issn = {0305-750X}, abstract = {Economic growth is often episodic but the ultimate drivers of such growth accelerations are not under-stood very well. We therefore take a different perspective and investigate what happens to production factors and productivity before, during, and after 156 growth accelerations that we identify for 148 coun-tries between 1950 and 2019. We are particularly interested in the role that physical capital accumula-tion can play in this context, given recent interest in investment surges and several investment-led growth models.Our results show that physical capital accumulation accounts on average for 9% of the increase in the growth rate during an acceleration, with heterogeneity across regions, time periods, and the economies' capital-output ratio. While growth accelerations are mainly driven by improvements in total factor pro-ductivity, we find that physical capital accumulation is an important factor for the sustainability of accel-erations. Those findings are robust to various techniques for identifying growth accelerations and growth decompositions. They suggest that large "investment-led" growth accelerations are unlikely but also con-firm that growth episodes that are not accompanied by solid investment patterns are likely to run out of steam.(c) 2023 The Author(s). Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).}, keywords = {Productivity improvements; Growth accelerations; Physical capital accumulation}, year = {2023}, eissn = {1873-5991}, orcid-numbers = {Wacker, Konstantin M./0000-0003-1923-0386} } @article{MTMT:34591355, title = {Africa's Great Moderation}, url = {https://m2.mtmt.hu/api/publication/34591355}, author = {Krantz, Sebastian}, doi = {10.1093/jae/ejad021}, journal-iso = {J AFR ECON}, journal = {JOURNAL OF AFRICAN ECONOMIES}, unique-id = {34591355}, issn = {0963-8024}, abstract = {Over the past 30 years, African economies have experienced remarkable improvements in macroeconomic conditions, characterised by higher and more stable real per-capita growth rates and lower and more stable inflation. This paper documents the persistent decline in macroeconomic volatility at the aggregate and sectoral levels and seeks to provide explanations. Sectoral analysis shows a particularly strong reduction of growth volatility in agriculture and, to a lesser extent, in services. Classical structural change only explains a small fraction of the moderation. Analysis of further factors yields that changes in structural characteristics such as institutions, trade intensity and diversification, natural resource dependence or conflict incidence do not explain the moderation. On the positive side, the paper provides evidence to suggest that changes in the external environment, improved macroeconomic policy frameworks and 'softer' structural improvements, such as the deepening of the domestic financial sector, were important in reducing macroeconomic volatility on the continent.}, keywords = {GROWTH; VOLATILITY; Structural change; INFLATION; macoeconomic stability; macroeconomic policy}, year = {2023}, eissn = {1464-3723} } @article{MTMT:34250055, title = {Effects of policy and economic uncertainty on investment activities and corporate financial reporting: a study of developing countries in Asia-Pacific}, url = {https://m2.mtmt.hu/api/publication/34250055}, author = {Kurniawan, Firdaus and Amanati, Hilma Tsani and Nugroho, Albertus Henri Listyanto and Pusparini, Nandya Octanti}, doi = {10.1108/ARA-12-2022-0290}, journal-iso = {AS REV ACCOUNT}, journal = {ASIAN REVIEW OF ACCOUNTING}, unique-id = {34250055}, issn = {1321-7348}, abstract = {PurposeThis study investigates the impact of government and economic policy uncertainty (EPU) on companies' business operations, especially risk-taking tendencies and corporate financial reporting quality (FRQ).Design/methodology/approachThe study employs the generalised least squares regression model. The final sample comprised 27,376 company-year observations from eight countries in the Asia-Pacific region.FindingsEPU has a negative and significant effect on investment activity and FRQ. Higher EPU leads to a decline in investment and FRQ.Research limitations/implicationsThere are several limitations in this study. First, the authors used abnormal investments to measure investments, without considering the degree of irreversibility investment objectives. Second, although control variables are included at the company and country levels, they may only partially control for companies' mitigation effects. Third, the sample is limited to developing countries with unique characteristics in Asia-Pacific; therefore, the findings cannot be generalised.Practical implicationsThe findings can help investors, analysts and regulators evaluate EPU's impact on companies' business activities by offering an overview regarding the decline in investment efficiency and FRQ. The results can also be used as input for regulators in formulating policies that encourage companies to regulate investment levels without harming other stakeholders and maintain FRQ during periods of uncertainty.Originality/valueThis research provides intriguing insights into EPU's effects on companies' investment activity and FRQ in developing countries, which are sensitive to changes in macroeconomic conditions.}, keywords = {Developing Countries; Economic uncertainty; Corporate investment; policy uncertainty; EPU; Quality of financial reporting}, year = {2023}, eissn = {1758-8863} } @article{MTMT:33860535, title = {Hard and soft factors of trade facilitation and export diversification. Evidence for developing and the least developed countries}, url = {https://m2.mtmt.hu/api/publication/33860535}, author = {Kurul, Zuhal}, doi = {10.1111/deve.12349}, journal-iso = {DEV ECON}, journal = {DEVELOPING ECONOMIES}, volume = {61}, unique-id = {33860535}, issn = {0012-1533}, abstract = {This study examines how developing and the least developed countries (LDCs) can foster export diversification by considering trade facilitation as an effective policy option. Unlike previous studies, this paper constructs composite indicators-namely, hard and soft factors of trade facilitation-to better clarify which trade facilitation aspect is a matter of priority. Also, it uses the number of products and markets based on Harmonized System (HS) six-digit level as export diversification measures. Finally, it investigates the differentiated impacts of hard and soft factors on export diversification in the LDCs. For the period 2007-17 and 92 countries, the results reveal that border efficiency promotes variety in products and markets, and the availability and quality of infrastructure enhances variety in markets for the whole sample of countries. Moreover, strengthening the availability and use of information and communication technologies (ICTs) plays a significant role in the LDCs' export diversification.}, keywords = {Developing Countries; Export diversification; Least developed countries; Hard and soft factors of trade facilitation}, year = {2023}, eissn = {1746-1049}, pages = {75-116} } @article{MTMT:33860538, title = {Beliefs Aggregation and Return Predictability}, url = {https://m2.mtmt.hu/api/publication/33860538}, author = {Kyle, Albert S. S. and Obizhaeva, Anna A. A. and Wang, Yajun}, doi = {10.1111/jofi.13195}, journal-iso = {J FINANC}, journal = {JOURNAL OF FINANCE}, volume = {78}, unique-id = {33860538}, issn = {0022-1082}, abstract = {We study return predictability using a model of speculative trading among competitive traders who agree to disagree about the precision of private information. Although traders apply Bayes' Law consistently, returns are predictable. In addition to trading on long-term fundamental value, traders also trade on perceived short-term opportunities arising from foreseen future disagreement, as in a Keynesian beauty contest. Contradicting conventional wisdom, this short-term speculation dampens price fluctuations and generates time-series momentum. Model calibration shows quantitatively realistic patterns of return dynamics. Consistent with empirical evidence, our model predicts more pronounced momentum for stocks with higher trading volume.}, year = {2023}, eissn = {1540-6261}, pages = {427-486} } @article{MTMT:33860539, title = {Rising Wages and Intra-Country Industry Relocation. Evidence from China}, url = {https://m2.mtmt.hu/api/publication/33860539}, author = {Li, Yuting and Mau, Karsten and Xu, Mingzhi}, doi = {10.1007/s11079-022-09691-5}, journal-iso = {OPEN ECON REV}, journal = {OPEN ECONOMIES REVIEW}, volume = {34}, unique-id = {33860539}, issn = {0923-7992}, abstract = {We analyze how rising labor costs contribute to economic restructuring in China. In a panel of prefectural cities and industries, spanning the years 1999-2007, we employ instrumental variables to identify the effect of increasing local wage levels. We find adverse effects on performance of (low-skilled) labor intensive industries in China's advanced regions. Consistent with cost-saving industry relocation, such industries expand in other locations, where wages are comparatively low. Comparing locations where such industries expand to those where they do not, we find that both economic complexity and subsequent per capita income increased faster in the former group.}, keywords = {CHINA; Regional development; O47; O14; R11; economic complexity; D24; O11; O53; Labor costs; Industry relocation}, year = {2023}, eissn = {1573-708X}, pages = {579-615} } @article{MTMT:34250051, title = {Structural change and export diversification: A comparison of CARICOM's position}, url = {https://m2.mtmt.hu/api/publication/34250051}, author = {Satnarine-Singh, Nirvana and Hosein, Roger and Saridakis, George}, doi = {10.1080/09638199.2023.2240910}, journal-iso = {J INT TRADE ECON DEV}, journal = {JOURNAL OF INTERNATIONAL TRADE & ECONOMIC DEVELOPMENT}, unique-id = {34250051}, issn = {0963-8199}, abstract = {This paper presents an analysis of structural transformation with respect to the CARICOM region's export sophistication and diversification dynamics. Trends in the data indicate that CARICOM, in relation to other country groups, has the lowest number of active export lines. The region also has a low number of commodities with comparative advantage, and an almost negligible number of highly sophisticated exports. The factors affecting export diversification were also evaluated in relation to resource and factor endowments, the regulatory environment and the degree of technical progress. The overall results, from a global perspective, indicate that countries which are technically advanced tend to have a higher degree of export diversification while resource reliant economies are shown to be less diversified. In terms of CARICOM, structural factors and technical progress significantly explain diversification, however as the ease of doing business improves, these countries tend to become more specialized therefore highlighting the tendency to focus on sectors in which they are relatively strong given their factor endowments.}, keywords = {DIVERSIFICATION; Structural change; Exports; Comparative advantage; >; Sophistication}, year = {2023}, eissn = {1469-9559} } @article{MTMT:33173620, title = {Economic globalization and fiscal performance}, url = {https://m2.mtmt.hu/api/publication/33173620}, author = {Shi, Jianxun and Xu, Ling and Yang, Jing}, doi = {10.1080/13504851.2022.2097168}, journal-iso = {APPL ECON LETT}, journal = {APPLIED ECONOMICS LETTERS}, volume = {30}, unique-id = {33173620}, issn = {1350-4851}, abstract = {This study attempts to assess the heterogeneous impact of economic globalization on fiscal performance in 77 countries over the period 1995-2017. We find that for high-income countries, trade globalization will increase their government expenditure, but financial globalization is conducive to increasing their revenue. For low-income countries, economic globalization will help to save their government expenditure, thereby improving their fiscal performance. For emerging countries, while economic globalization increases both government expenditure and revenue, the combined effect is not conducive to their good fiscal performance.}, keywords = {GMM; Dynamic panel data; economic globalization; fiscal performance}, year = {2023}, eissn = {1466-4291}, pages = {2348-2354} } @article{MTMT:33860537, title = {Economic policy uncertainty and trade. does export sophistication matter?}, url = {https://m2.mtmt.hu/api/publication/33860537}, author = {Yayi, Constant L. L.}, doi = {10.1080/00036846.2023.2166672}, journal-iso = {APPL ECON}, journal = {APPLIED ECONOMICS}, volume = {56}, unique-id = {33860537}, issn = {0003-6846}, abstract = {In spite of the recent surge of research interest on the economic effect of policy uncertainties, trade behaviour during times of policy uncertainties is still not fully understood. We use the trade gravity model to examine the effects of economic policy uncertainty (EPU) on the trade of 22 countries over the period 1997-2020, based on the argument that EPU inflates bilateral trade costs. Overall, our results indicate that bilateral trade, exports, and imports are all negatively and significantly affected by both domestic and foreign policy uncertainties. Moreover, we document substantial heterogeneous trade reactions to policy uncertainties across countries. Specifically, in more export-sophisticated countries, our results show that only foreign policy uncertainty has a significant and negative effect on trade; whereas in less export-sophisticated countries, trade is significantly and negatively affected by both domestic and foreign EPU. These findings point to the double vulnerability of less export-sophisticated countries to domestic and foreign policy uncertainties and, to the resiliency of more export-sophisticated countries to domestic policy uncertainties and to their vulnerability to foreign policy uncertainties.}, keywords = {TRADE; Gravity model; economic policy uncertainty; Export sophistication}, year = {2023}, eissn = {1466-4283}, pages = {169-185} } @article{MTMT:33173614, title = {The nexus between real exchange rate misalignment and US-China trade. evidence from post RMB regimes}, url = {https://m2.mtmt.hu/api/publication/33173614}, author = {Abbas, Shah and Lu, Xiaoyong and Qiu, Minrong and Chen, Ai and Gui, Peng}, doi = {10.1080/19186444.2022.2127392}, journal-iso = {Transnational Corporations Review}, journal = {Transnational Corporations Review}, volume = {14}, unique-id = {33173614}, issn = {1918-6444}, abstract = {This paper investigates the impact of real exchange rate volatility and misalignment on exports and imports between China and the United States. Our empirical analysis used the quarterly time series data over the 1994Q:1-2019Q:4 period. We used the ARDL-bound testing approach for the short- and long-run relationship. The empirical results reveal that China's real exchange rate volatility and misalignment significantly impact China's real exports and imports over the sample period. In the short-run, the relationship between real exchange rate misalignments and China's exports is positive, whereas negative with imports from the United States. In the long run, the real exchange rate misalignment positively affects exports and negatively affects imports. The evidence suggests that both higher real exchange rate volatility and misalignment directly affect the relative price of goods and encourage China exports to United States.}, keywords = {USA; ARDL; Exchange rate volatility and misalignment; China RMB; bound test}, year = {2022}, eissn = {1925-2099}, pages = {402-417} } @article{MTMT:32955092, title = {The Economic Complexity Index (ECI) and output volatility: High vs. low income countries}, url = {https://m2.mtmt.hu/api/publication/32955092}, author = {Breitenbach, Marthinus C. and Chisadza, Carolyn and Clance, Matthew}, doi = {10.1080/09638199.2021.1995467}, journal-iso = {J INT TRADE ECON DEV}, journal = {JOURNAL OF INTERNATIONAL TRADE & ECONOMIC DEVELOPMENT}, volume = {31}, unique-id = {32955092}, issn = {0963-8199}, abstract = {In this study, we explore whether more complex economies are better shielded against exogenous shocks. We contribute to the literature on determinants of output volatility with a relatively new index on productive capabilities of export goods, the Economic Complexity Index (ECI), developed by Hausmann et al. [Hausmann, R., C. A. Hidalgo, S. Bustos, M. Coscia, A. Simoes, and M. A. Yildirim. 2014. The Atlas of Economic Complexity: Mapping Paths to Prosperity. MIT Press]. The ECI measures the productive capabilities of countries by explaining the knowledge accumulated in a population based on the goods produced and exported and to which countries they export. Therefore ECI captures diversification as well as the technology embedded in the products. Using panel data analysis for a cross section of countries from 1984 to 2016, we find variations in the effects of ECI on output volatility between high and low income countries. For high income countries, increases in ECI reduce output volatility in the short to medium term with a longer delay in output volatility moderation for low income countries. Findings suggest that low income countries have less diversified and less complex export goods which leave them open to external shocks and reduce their ability to adjust quickly to the shocks. Furthermore, disaggregation by regions reveals that economic complexity in Asia is relatively more effective at reducing output volatility than in Africa.}, keywords = {PANEL DATA; fixed effects model; low income countries; economic complexity; Export diversification; Output volatility; high vs}, year = {2022}, eissn = {1469-9559}, pages = {566-580}, orcid-numbers = {Chisadza, Carolyn/0000-0002-9340-210X; Clance, Matthew/0000-0002-9280-7324} } @article{MTMT:32955082, title = {Market liquidity and excess volatility: Theory and experiment}, url = {https://m2.mtmt.hu/api/publication/32955082}, author = {Choi, Jae Hoon and Munro, David}, doi = {10.1016/j.jedc.2022.104442}, journal-iso = {J ECON DYN CONTROL}, journal = {JOURNAL OF ECONOMIC DYNAMICS & CONTROL}, volume = {139}, unique-id = {32955082}, issn = {0165-1889}, abstract = {Understanding the sources of excess volatility is a prominent question in finance. We theoretically examine the interaction between financial market development, specifically market liquidity, and excess volatility. Using a game theoretic model of investor behavior where agents learn about the fundamental value of assets over time, we highlight how market liquidity impacts traders' sensitivity to information about assets and how this impacts excess volatility in the market. We explore these predictions in laboratory asset markets where liquidity is exogenously varied and find that traders' sensitivity to news about asset values and excess volatility is higher in low liquidity markets. We also find that traders in low liquidity markets have an over-sensitivity, relative to theory, to the liquidations of others, suggesting that herding behavior is more prominent in less liquid markets. (C) 2022 Elsevier B.V. All rights reserved.}, keywords = {experiment; Market liquidity; Excess volatility}, year = {2022}, eissn = {1879-1743} } @article{MTMT:32955089, title = {Liquidity Risk and Long-Term Finance: Evidence from a Natural Experiment}, url = {https://m2.mtmt.hu/api/publication/32955089}, author = {Choudhary, M. Ali and Limodio, Nicola}, doi = {10.1093/restud/rdab065}, journal-iso = {REV ECON STUD}, journal = {REVIEW OF ECONOMIC STUDIES}, volume = {89}, unique-id = {32955089}, issn = {0034-6527}, abstract = {Banks in low-income countries face severe liquidity risk due to volatile deposits, which destabilize their funding, and dysfunctional liquidity markets, which induce expensive interbank and central bank lending. Such liquidity risk dissuades the transformation of short-term deposits into long-term loans and deters long-term investment. To validate this mechanism, we exploit a Sharia-compliant levy in Pakistan, which generates unintended and quasi-experimental variation in liquidity risk, with data from the credit registry and firm imports. We find that banks with a stronger exposure to liquidity risk lower their supply of long-term finance, which reduces the long-term investment of connected firms.}, keywords = {INVESTMENT; banking; Financial development; G21; E58; O16; Central banks; O12}, year = {2022}, eissn = {1467-937X}, pages = {1278-1313} } @article{MTMT:33173619, title = {Self-enforcing contracts with persistence}, url = {https://m2.mtmt.hu/api/publication/33173619}, author = {Dumav, Martin and Fuchs, William and Lee, Jangwoo}, doi = {10.1016/j.jmoneco.2022.03.010}, journal-iso = {J MONETARY ECON}, journal = {JOURNAL OF MONETARY ECONOMICS}, volume = {128}, unique-id = {33173619}, issn = {0304-3932}, abstract = {We show theoretically that, in the presence of persistent productivity shocks, the reliance on self-enforcing contracts due to limited legal enforcement may provide a possible rationale why countries with the worse rule of law might exhibit: (i) higher aggregate TFP volatilities, (ii) larger dispersion of firm-level productivity, and (iii) greater wage inequality. We also provide suggestive empirical evidence consistent with the model's aggregate implications. Finally, we relate the model's firm-level implications to existing empirical findings. (C) 2022 The Authors. Published by Elsevier B.V.}, keywords = {PRODUCTIVITY; persistence; Dynamic moral hazard; Relational contracts; Limited commitment}, year = {2022}, eissn = {1873-1295}, pages = {72-87} } @article{MTMT:33173618, title = {Networks and Economic Fragility}, url = {https://m2.mtmt.hu/api/publication/33173618}, author = {Elliott, Matthew and Golub, Benjamin}, doi = {10.1146/annurev-economics-051520-021647}, journal-iso = {ANNU REV ECON}, journal = {ANNUAL REVIEW OF ECONOMICS}, volume = {14}, unique-id = {33173618}, issn = {1941-1383}, abstract = {Many firms, banks, or other economic agents embedded in a network of codependencies may experience a contemporaneous, sharp drop in functionality or productivity following a shock-even if that shock is localized or moderate in magnitude. We offer an extended review of motivating evidence that such fragility is a live concern in supply networks and in financial systems. We then discuss network models of fragility; focusing on the forces that make aggregate functionality especially sensitive to the economic environment. The key structural features of networks that determine their fragility are reviewed, with an emphasis on the importance of phase transitions. We then turn to endogenous decisions, both by market participants (e.g., firms investing in network formation and robustness) and by planners (e.g., authorities undertaking macroprudential regulation). Fragility has some distinctive implications for such decisions.}, keywords = {NETWORKS; Fragility; Supply chains; Robustness; Production networks; supply disruptions}, year = {2022}, eissn = {1941-1391}, pages = {665-696} } @article{MTMT:33173616, title = {Effect of Structural Economic Vulnerability on the Participation in International Trade}, url = {https://m2.mtmt.hu/api/publication/33173616}, author = {Gnangnon, Sena Kimm}, doi = {10.3390/jrfm15090417}, journal-iso = {J RISK FINANC MANAG}, journal = {JOURNAL OF RISK AND FINANCIAL MANAGEMENT}, volume = {15}, unique-id = {33173616}, issn = {1911-8066}, abstract = {This paper investigates the effect of countries' structural economic vulnerability (EVI) on their participation in international trade using an unbalanced panel dataset of 118 countries from 1996 to 2018 and the two-step system generalized method of moments estimator. It has revealed several findings. Higher EVI leads to lower participation in international trade, and this negative effect is more pronounced in countries that face higher trade costs. This is particularly the case for landlocked developing countries and the least developed countries. Development aid contributes to dampening the negative effect of EVI on countries' participation in international trade. Moreover, this negative impact may turn out to be positive for high amounts of development aid. The policy implications of this analysis have been discussed.}, keywords = {trade costs; Development aid; participation in international trade; structural economic vulnerability}, year = {2022}, eissn = {1911-8074} } @article{MTMT:32955085, title = {Export diversification and financial openness}, url = {https://m2.mtmt.hu/api/publication/32955085}, author = {Gnangnon, Sena Kimm}, doi = {10.1007/s10368-022-00533-w}, journal-iso = {INT ECON ECON POL}, journal = {INTERNATIONAL ECONOMICS AND ECONOMIC POLICY}, volume = {19}, unique-id = {32955085}, issn = {1612-4804}, abstract = {This paper investigates empirically the effect of export diversification (i.e. both export product diversification and services export diversification) on financial openness, using a sample of 119 countries (including both developed and developing countries) over the period 1985-2014. Based on the Blundell and Bond's two-step system Generalized Method of Moments, the analysis has revealed that both export product diversification and services export diversification influence positively financial openness. However, this outcome hides differentiated effects across countries in the full sample. Especially, countries with a very high real per capita income experience a positive effect of export concentration on financial openness, while for countries with a relatively lower per capita income, it is rather export diversification that drives positively financial openness. Interestingly, the effect of export diversification on financial openness depends on the size of external shocks that affect domestic economies, as well as countries' economic growth performance. Overall, these findings add to the empirical literature on the effect of international trade on financial openness by showing that both export product diversification and services export diversification matter for financial openness.}, keywords = {developed and developing countries; financial openness; Export product diversification; Services export diversification}, year = {2022}, eissn = {1612-4812}, pages = {675-717} } @article{MTMT:32955083, title = {Internet, Participation in International Trade, and Tax Revenue Instability}, url = {https://m2.mtmt.hu/api/publication/32955083}, author = {Gnangnon, Sena Kimm}, doi = {10.11130/jei.2022.37.2.267}, journal-iso = {J ECON INTEGRAT}, journal = {JOURNAL OF ECONOMIC INTEGRATION}, volume = {37}, unique-id = {32955083}, issn = {1225-651X}, abstract = {This study investigates the effect of the Internet on tax revenue instability (TRI), notably through the international trade channel. It used a sample of 142 countries over the period 1995-2017 and relied primarily on the two-step system generalized method of moments estimator. The findings indicate that greater access to the Internet negatively affects TRI, and this effect works through the trade openness avenue. Especially, countries enjoy a higher negative effect of the Internet on TRI as they experience a greater trade openness. Moreover, Internet access reduces TRI in countries that have experienced a greater extent of tax reform and a greater export product concentration. Therefore, these findings add to the potential benefits of Internet adoption by showing that it could also help stabilize tax revenue, particularly through countries' participation in international trade.}, keywords = {Internet use; participation in international trade; tax revenue instability}, year = {2022}, pages = {267-315} } @article{MTMT:32320152, title = {Economic crises, civilian mobilization, and repression in developing states}, url = {https://m2.mtmt.hu/api/publication/32320152}, author = {Koren, Ore and Mukherjee, Bumba}, doi = {10.1177/07388942211024956}, journal-iso = {CONFLICT MANAG PEACE}, journal = {CONFLICT MANAGEMENT AND PEACE SCIENCE}, volume = {39}, unique-id = {32320152}, issn = {0738-8942}, abstract = {Research on the causes of repression has had limited success in connecting economic crises to state-led violence. We develop an explanation for violent government repression in urban areas, which links the importance of urban infrastructure in enabling civilians to wage an effective opposition campaign with the stress caused by economic crisis, empirically validating the underlying mechanisms using disaggregated geospatial data. We then confirm the empirical expectation that governments will violently repress during times of economic crisis where the civilians' capacity to wage a collective action campaign is high using a disaggregated global sample of urban areas within developing states.}, keywords = {REPRESSION; URBANIZATION; political economy; social conflict}, year = {2022}, eissn = {1549-9219}, pages = {520-541} } @article{MTMT:32955084, title = {Export diversification in low-income countries and small states: Do country size and income level matter?}, url = {https://m2.mtmt.hu/api/publication/32955084}, author = {Lee, Dongyeol and Zhang, Huan}, doi = {10.1016/j.strueco.2021.11.017}, journal-iso = {STRUCT CHANGE ECON DYNAM}, journal = {STRUCTURAL CHANGE AND ECONOMIC DYNAMICS}, volume = {60}, unique-id = {32955084}, issn = {0954-349X}, abstract = {Export structure is less diversified in low-income countries (LICs) and small states that generally face constraints in resources and economic size. This paper presents an empirical analysis on the linkages between export structure and economic growth/volatility in LICs and small states, by using a variant of export concentration indices. The analysis documents that export diversification in products or industries may promote economic growth and reduce economic volatility in these countries. The analysis further demonstrates that the economic benefits of export diversification differ by the country size and income level-larger gains for relatively small and poor countries within a group of LICs and small states. In addition, diversification in export partners or markets tends to be beneficial for economic growth and stability.(c) 2021 Elsevier B.V. All rights reserved.}, keywords = {GROWTH; VOLATILITY; Low-income countries; small states; Export diversfication}, year = {2022}, eissn = {1873-6017}, pages = {250-265}, orcid-numbers = {Lee, Dongyeol/0000-0001-9359-8117} } @article{MTMT:33173617, title = {Institutions Rule in Export Diversity}, url = {https://m2.mtmt.hu/api/publication/33173617}, author = {Lei, Wenni and Luo, Yuwei}, doi = {10.3390/su141811594}, journal-iso = {SUSTAINABILITY-BASEL}, journal = {SUSTAINABILITY}, volume = {14}, unique-id = {33173617}, abstract = {We used the data of 133 countries to explore the determinants of export diversity among candidate variables that are clearly exogenous or endogenous but with a well-established instrument. These candidates include geography, resource abundance, and institutional quality. Our results suggest that institutional quality is important in determining export diversity, and a country with better institutions has a more diversified export structure. Once institutional quality is controlled for and instrumented with European settler mortality, variables such as geography and resource abundance, which significantly determine export diversity in the baseline regression, are no longer significant. The results are still robust even using alternative measures of institutional quality. They also indicate that the mechanism whereby institutions largely determine export diversity has been presented under the guise of natural resource abundance and geography. Therefore, to some extent, the "natural resource curse" is not a curse, but simply two sides of the same coin.}, keywords = {Institutional quality; Export Concentration; export diversity; natural resource curse}, year = {2022}, eissn = {2071-1050} } @article{MTMT:33860540, title = {Analysis of Export Diversification and Impact of Globalisation on Income Inequality: Evidence from Asian Countries}, url = {https://m2.mtmt.hu/api/publication/33860540}, author = {Li, Dan and Wang, Xinyao and Xu, Yubing and Ren, Yutian}, doi = {10.1080/1226508X.2022.2120518}, journal-iso = {GLOBAL ECON REV}, journal = {GLOBAL ECONOMIC REVIEW}, volume = {51}, unique-id = {33860540}, issn = {1226-508X}, abstract = {Due to the importance of product and geographical diversification of exports, the gravity equation was used to predict export diversification for 19 Asian countries from 2004 to 2017 and the System Generalised Method of Moments was used to analyse the dynamic impact of globalisation at the disaggregated level of the diversification of sectoral exports and the goods specialisation on income inequalities. The results show that sectoral diversification of exports is the driving force of inequality. Furthermore, increased diversification of exports in the highly-income countries of Asia increases inequality and has little impact on low-income countries in Asia.}, keywords = {DIVERSIFICATION; Globalisation; INCOME INEQUALITY; Gravity equation; generalised method of moments}, year = {2022}, eissn = {1744-3873}, pages = {195-215} } @article{MTMT:32320148, title = {Maize price volatility and deforestation}, url = {https://m2.mtmt.hu/api/publication/32320148}, author = {Lundberg, Clark and Abman, Ryan}, doi = {10.1111/ajae.12246}, journal-iso = {AM J AGR ECON}, journal = {AMERICAN JOURNAL OF AGRICULTURAL ECONOMICS}, volume = {104}, unique-id = {32320148}, issn = {0002-9092}, abstract = {We develop a model of deforestation using a real option on agricultural land conversion and establish an important link between agricultural commodity price volatility and forest loss. Higher price volatility of staple commodities increases incentives to delay land conversion and is associated with lower levels of deforestation. Using satellite-derived estimates of local deforestation and high-frequency local maize prices across a panel of market catchments across 26 countries in sub-Saharan Africa, we find strong empirical evidence that maize price volatility is negatively associated with forest loss. Our findings are driven by catchments in biomes that are relatively well-suited to maize production. Instrumenting for changes in price levels and price volatility with spatially explicit temperature and rainfall anomalies yields results consistent with our main approach. The findings highlight important tensions between agricultural price stabilization policies, conservation efforts, and environmental externalities.}, keywords = {Deforestation; Land conversion; real option; agricultural expansion; commodity volatility; price stabilization}, year = {2022}, eissn = {1467-8276}, pages = {693-716} } @article{MTMT:32955086, title = {Does a Stronger Business Environment Increase Export Variety?}, url = {https://m2.mtmt.hu/api/publication/32955086}, author = {Yin, Hua and Xie, Qing and Zhou, Dinggen}, doi = {10.1080/1540496X.2022.2045942}, journal-iso = {EMERG MARK FINANC TR}, journal = {EMERGING MARKETS FINANCE AND TRADE}, volume = {58}, unique-id = {32955086}, issn = {1540-496X}, abstract = {Optimizing the business environment is a new competitive edge to global economies in international competition and cooperation. Export variety is an important basis for the implementation of a country's foreign trade diversification strategy. However, the impact of the business environment on export diversity remains unclear. Using World Bank Doing Business data and detailed product data of 145 countries from 2010 to 2018, we investigate the effects of the business environment on the export variety of home countries. We separate regulatory variables based on different stages of a firm's life cycle and examine which regulatory factors of doing business influence export variety. The results show that business environment improvement promotes export variety through an increase in foreign direct investment (FDI). The improvement of the business environment promotes the export variety mainly in non-high-income countries but not in high-income countries. Dealing with construction permit negatively affect export variety, while trading across borders and resolving insolvency improve export variety.}, keywords = {Export variety; FDI; Business environment; FGLS}, year = {2022}, eissn = {1558-0938}, pages = {3395-3415} } @article{MTMT:33219589, title = {Robot adoption and green productivity: Curse or Boon}, url = {https://m2.mtmt.hu/api/publication/33219589}, author = {Zhang, Qinan and Zhang, Fanfan and Mai, Qiang}, doi = {10.1016/j.spc.2022.08.025}, journal-iso = {SUSTAIN PRODUCT CONSUMP}, journal = {SUSTAINABLE PRODUCTION AND CONSUMPTION}, volume = {34}, unique-id = {33219589}, issn = {2352-5509}, abstract = {Recent studies demonstrated that robotics has improved efficiency in several fields, but they seem to ignore the fact that replacing human labor with robots may lead to extra energy consumption, which will raise concerns about more serious environmental problems. In this paper, we use a combined data set to explore the relationship between robot adoption and green productivity. The result shows that the adoption of robots in production does lead to new pollution sources, but there is no direct evidence that the rebound effects will threaten green productivity, and the existence of scale compensation is instead conducive to a transformation towards cleaner production modes. More importantly, using robots to replace human labor means improvements in energy efficiency and positive market selection effects, all of which can help to boost green productivity. Therefore, robot adoption is a boon for green productivity rather than a curse, and they have been proved to be beneficial even in regions dominated by high pollution industries despite green productivity gains inequality. Our findings provide new evidence for the green-biased character of robotics and new thoughts for understanding the environmental outcomes of robot adoption.(c) 2022 Institution of Chemical Engineers. Published by Elsevier Ltd. All rights reserved.}, keywords = {Rebound effect; industrial robot; green productivity; Energy efficiency improvement}, year = {2022}, pages = {1-11} } @article{MTMT:32218314, title = {Why is growth in developing countries so hard to measure?}, url = {https://m2.mtmt.hu/api/publication/32218314}, author = {Angrist, Noam and Goldberg, Pinelopi Koujianou and Jolliffe, Dean}, doi = {10.1257/jep.35.3.215}, journal-iso = {J ECON PERSPECT}, journal = {JOURNAL OF ECONOMIC PERSPECTIVES}, volume = {35}, unique-id = {32218314}, issn = {0895-3309}, year = {2021}, eissn = {1944-7965}, pages = {215-242} } @article{MTMT:32320149, title = {The welfare costs of uncertainty: Cross-country evidence}, url = {https://m2.mtmt.hu/api/publication/32320149}, author = {Aurland-Bredesen, Kine Josefine}, doi = {10.1016/j.worlddev.2021.105478}, journal-iso = {WORLD DEV}, journal = {WORLD DEVELOPMENT: THE MULTI-DISCIPLINARY INTERNATIONAL JOURNAL DEVOTED TO THE STUDY AND PROMOTION OF WORLD DEVELOPMENT}, volume = {146}, unique-id = {32320149}, issn = {0305-750X}, abstract = {The paper estimates the welfare costs of uncertainty for six different economic groups of countries. The source of uncertainty is both economic fluctuations and macroeconomic disasters. For each of the groups of countries, the trend growth rate, growth rate volatility, disaster probability, and the size distribution of disasters are estimated. Adjacent groups differ significantly in terms of growth and uncertainty, but within each group, the welfare gains of growth and the welfare cost of uncertainty are generally in the same magnitude. However, analysis shows that small increases in growth may have a more significant impact on the welfare costs of uncertainty than large decreases in uncertainty. (c) 2021 Elsevier Ltd. All rights reserved.}, keywords = {Macroeconomic disasters; Welfare costs of uncertainty}, year = {2021}, eissn = {1873-5991} } @article{MTMT:32320157, title = {Engines of sectoral labor productivity growth}, url = {https://m2.mtmt.hu/api/publication/32320157}, author = {Barany, Zsofia L. and Siegel, Christian}, doi = {10.1016/j.red.2020.07.007}, journal-iso = {REV ECON DYNAM}, journal = {REVIEW OF ECONOMIC DYNAMICS}, volume = {39}, unique-id = {32320157}, issn = {1094-2025}, abstract = {We study the origins of labor productivity growth and its differences across sectors. In our model, sectors employ workers of different occupations and various forms of capital, none of which are perfect substitutes, and technology evolves at the sector-factor cell level. Using the model we infer technologies from US data over 1960-2017. We find that sectoral differences in labor productivity growth are largely due to sectoral differences in the growth rate of routine labor augmenting technologies. Neither capital accumulation nor the occupational employment structure within sectors explains much of the sectoral differences in labor productivity growth. (C) 2020 Elsevier Inc. All rights reserved.}, keywords = {Structural transformation; Labor productivity; Biased technological change}, year = {2021}, eissn = {1096-6099}, pages = {304-343}, orcid-numbers = {Siegel, Christian/0000-0002-1686-8686} } @article{MTMT:32320156, title = {Drivers of structural convergence: Accounting for model uncertainty and reverse causality}, url = {https://m2.mtmt.hu/api/publication/32320156}, author = {Beck, Krzysztof}, doi = {10.15678/EBER.2021.090112}, journal-iso = {EBER}, journal = {ENTREPRENEURIAL BUSINESS AND ECONOMICS REVIEW}, volume = {9}, unique-id = {32320156}, issn = {2353-883X}, abstract = {Objective: The objective of the article is the examination of factors that affect structural convergence and assessing their robustness.Research Design & Methods: Determinants of structural similarity are examined using the Bayesian model averaging with dilution prior to establishing robust drivers in the long run. The short-run analysis is conducted using Bayesian model averaging within a dynamic panel framework with weakly exogenous regressors.Findings: The application of Bayesian model averaging allowed for the identification of 12 variables associated with more similar production structures, among others, the bilateral total and intra-industry trade, the level of development, geographical distance, foreign direct investment flows, technology, corruption, and membership in the EU. Accounting for reverse causality showed that trade induces divergence in the short run - in line with predictions of neoclassical theories - but is associated with more similar production structures in the long run. Interestingly, even though old EU countries are characterised by more homogenous production structures, EU membership is associated with structural divergence once differences in income are included in the model. Even more unexpectedly, countries with more similar production structures are characterised by more similar and generally lower levels of corruption.Implications & Recommendations: The analysis shows that policies aiming at the promotion of FDI and technological transfers can speed up the process of structural convergence.Contribution & Value Added: The paper presents the first systematic analysis into the sources of structural similarity.}, keywords = {European Union; economic structure; Structural similarity; economic integration; structural convergence}, year = {2021}, eissn = {2353-8821}, pages = {189-208}, orcid-numbers = {Beck, Krzysztof/0000-0003-3679-2962} } @article{MTMT:32320151, title = {Commodity boom-bust cycles and the resource curse in Australia: 1900 to 2007}, url = {https://m2.mtmt.hu/api/publication/32320151}, author = {Bhattacharyya, Sambit}, doi = {10.1111/aehr.12219}, journal-iso = {AUST ECON HIST REV}, journal = {AUSTRALIAN ECONOMIC HISTORY REVIEW}, volume = {61}, unique-id = {32320151}, issn = {0004-8992}, abstract = {The Australian economy experienced very frequent and sizeable terms of trade shocks. These shocks at times were more pronounced than commodity exporting developing countries and disproportionately benefited the extreme top end of income distribution. Did they derail overall economic progress? Circumstantial evidence suggests that they did not, but hard econometric evidence appears to be rare. In this paper, I revisit the Australian resource curse question from a long-run perspective. Using time series data on commodity prices, real GDP, real wages, non-farm GDP, manufacturing share of GDP, and manufacturing share of employment covering the period 1900 to 2007, I find very little evidence of a resource curse. Commodity booms in general and positive agricultural price shocks in particular appear to have impacted the rest of the economy positively both in short- and long-run. The positive effect is primarily led by expansion in manufacturing. This is perhaps reflective of trade protection, labour and credit market flexibility, and relatively open skilled migration in Australia especially during the post-war period.}, keywords = {resource curse; commodity price shocks}, year = {2021}, eissn = {1467-8446}, pages = {186-203}, orcid-numbers = {Bhattacharyya, Sambit/0000-0001-5932-6943} } @article{MTMT:32320150, title = {Social Interaction of the State and Society as a Reference Point of Public Marketing}, url = {https://m2.mtmt.hu/api/publication/32320150}, author = {Bondarenko, Olena and Kozarezenko, Liudmyla and Chunikhina, Tetiana and Solomka, Olga}, doi = {10.25115/eea.v39i6.5121}, journal-iso = {ESTUD ECON APL}, journal = {ESTUDIOS DE ECONOMIA APLICADA}, volume = {39}, unique-id = {32320150}, issn = {1133-3197}, abstract = {Social interaction between the state and society is an essential criterion of democracy. The state and society social interaction level assessment is significant for developing a democratic society and the positioning of states in the global environment, which is the target of public marketing. In recent years, special attention has been paid to the research area regarding the public marketing impact on the state socially-oriented tasks successful implementation. However, there is a lack of research that assesses the state and society social interaction level through indicators of socio-economic development of countries, which are determined by the public marketing influence mechanism. The obtained results can be helpful for public administration bodies of different countries to implement the democratic society sustainable development tasks. The article develops a scientifically substantiated array of tools for assessing the level of social interaction between the state and society by calculating a taxonomic indicator based on the socio-economic development of different countries.}, keywords = {economic development; Social interaction; Marketing; public management}, year = {2021}, eissn = {1697-5731}, orcid-numbers = {Bondarenko, Olena/0000-0002-5990-2522; Solomka, Olga/0000-0001-5137-1934} } @article{MTMT:32320154, title = {Relative Productivity, Country Size and Export Diversification}, url = {https://m2.mtmt.hu/api/publication/32320154}, author = {Cieslik, Andrzej and Parteka, Aleksandra}, doi = {10.1016/j.strueco.2021.01.002}, journal-iso = {STRUCT CHANGE ECON DYNAM}, journal = {STRUCTURAL CHANGE AND ECONOMIC DYNAMICS}, volume = {57}, unique-id = {32320154}, issn = {0954-349X}, abstract = {This paper analyses the effects of productivity and country size on the extent of trade structure diver-sification. Using a testable version of the Ricardian model, we show that relative export variety is an outcome of two forces: a relative productivity change (technological progress) and a relative country size change (labour force growth). The model predictions are validated empirically using product-level trade data for a sample of 132 countries (1988-2014), including 53 low-income countries. We find a robust positive relationship between export variety and the countries' relative productivity, as well as a negative relationship between export variety and the expansion of foreign economies (i.e., the growth of the RoW). The effect of technology differences on export variety is driving diversification especially at the beginning of the development process. The results are robust to changes in the measurement of export variety (also in terms of economic complexity), in the set of control variables, or in the estimation methods.(c) 2021 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license ( http://creativecommons.org/licenses/by-nc-nd/4.0/ )}, keywords = {economic development; Export variety; Export diversification; Ricardian model; relative productivity; relative country size}, year = {2021}, eissn = {1873-6017}, pages = {28-44} } @article{MTMT:32320147, title = {Commodity prices and banking crises}, url = {https://m2.mtmt.hu/api/publication/32320147}, author = {Eberhardt, Markus and Presbitero, Andrea F.}, doi = {10.1016/j.jinteco.2021.103474}, journal-iso = {J INT ECON}, journal = {JOURNAL OF INTERNATIONAL ECONOMICS}, volume = {131}, unique-id = {32320147}, issn = {0022-1996}, abstract = {Commodity prices are one of the most important drivers of output fluctuations in developing countries. We show that a major channel through which commodity price movements can affect the real economy is through their effect on banks' balance sheets and financial stability. Our analysis finds that the volatility of commodity prices is a significant predictor of banking crises in a sample of 60 low-income countries (LICs). In contrast to recent findings for advanced and emerging economies, credit booms and capital inflows do not play a significant role in predicting banking crises, consistent with a lack of de facto financial liberalization in LICs. We corroborate our main findings with historical data for 40 'peripheral' economies between 1848 and 1938. The effect of commodity price volatility on banking crises is concentrated in LICs with a fixed exchange rate regime and a high share of primary goods in production. We also find that commodity price volatility is likely to trigger financial instability through a reduction in government revenues and a shortening of sovereign debt maturity, which are likely to weaken banks' balance sheets. (C) 2021 Elsevier B.V. All rights reserved.}, keywords = {VOLATILITY; low income countries; Banking crises; Commodity prices}, year = {2021}, eissn = {1873-0353} } @article{MTMT:31450738, title = {Does value chain integration dampen producer price developments? Evidence from the European Union}, url = {https://m2.mtmt.hu/api/publication/31450738}, author = {Friesenbichler, Klaus S. and Kuegler, Agnes and Reinstaller, Andreas}, doi = {10.1111/twec.12993}, journal-iso = {WORLD ECON}, journal = {WORLD ECONOMY}, volume = {44}, unique-id = {31450738}, issn = {0378-5920}, abstract = {We draw on trade theory to empirically explore the effects of value chain integration on producer price dynamics. Using the EU as an example of an integrated area, we construct measures of backward and forward linkages with intra- and extra-EU trading partners at the country-sector level. We find that especially upstream integration and EU accession dampen inflation. The results for downstream integration indicate a price-increasing relationship. We propose novel EU integration indicators and offer insights to both theory and applied research. We also add to the policy debate on the price effects of (dis-)integration of EU countries.}, keywords = {INFLATION; Value chains; EU integration; producer prices; Single Market}, year = {2021}, eissn = {1467-9701}, pages = {89-106} } @article{MTMT:32320155, title = {Global volatility accounting and structural transformation}, url = {https://m2.mtmt.hu/api/publication/32320155}, author = {Harchaoui, Tarek M.}, doi = {10.1093/oep/gpz074}, journal-iso = {OXFORD ECON PAP}, journal = {OXFORD ECONOMIC PAPERS-NEW SERIES}, volume = {73}, unique-id = {32320155}, issn = {0030-7653}, abstract = {This paper examines whether the modern phase of globalization that started in the mid-1980s altered the canonical result which emphasizes that macroeconomic volatility declines with development. The application of a framework that gives due consideration to comovements and structural transformation to a near-universe sample of economies at different stages of economic development suggests the following set of results. First, with an explicit account for the roles of structural transformation and comovements, macroeconomic volatility declines during the modern phase of globalization for the Centre while it increases for the Periphery. Second, macroeconomic volatility of the Periphery declines with development only where structural transformation is ruled out-an unrealistic situation. Third, comovements are found to be quantitatively important, albeit without altering the fact that structural transformation constitutes the primary vehicle of transmissions of volatility from the Centre to the Periphery, where China emerges as the epicentre.}, year = {2021}, eissn = {1464-3812}, pages = {720-743} } @article{MTMT:32098612, title = {Trade in commodities and business cycle volatility}, url = {https://m2.mtmt.hu/api/publication/32098612}, author = {Kohn, David and Leibovici, Fernando and Tretvoll, Håkon}, doi = {10.1257/mac.20180131}, journal-iso = {AM ECON J-MACROECON}, journal = {AMERICAN ECONOMIC JOURNAL-MACROECONOMICS}, volume = {13}, unique-id = {32098612}, issn = {1945-7707}, year = {2021}, eissn = {1945-7715}, pages = {173-208} } @article{MTMT:32795640, title = {Propagation of economic shocks through vertical and trade linkages in Korea. An empirical analysis}, url = {https://m2.mtmt.hu/api/publication/32795640}, author = {Lee, Dongyeol}, doi = {10.1016/j.japwor.2021.101103}, journal-iso = {JPN WORLD ECON}, journal = {JAPAN AND THE WORLD ECONOMY}, volume = {60}, unique-id = {32795640}, issn = {0922-1425}, year = {2021}, eissn = {1879-2006}, orcid-numbers = {Lee, Dongyeol/0000-0001-9359-8117} } @article{MTMT:32320158, title = {Production network structure, service share, and aggregate volatility}, url = {https://m2.mtmt.hu/api/publication/32320158}, author = {Miranda-Pinto, Jorge}, doi = {10.1016/j.red.2020.07.001}, journal-iso = {REV ECON DYNAM}, journal = {REVIEW OF ECONOMIC DYNAMICS}, volume = {39}, unique-id = {32320158}, issn = {1094-2025}, abstract = {This paper shows that GDP growth volatility declines with production network diversification. To account for this evidence, I build a multisector model with CES technologies and a cost of complexity in the bundle of intermediates. Production network diversification decreases volatility when intermediate inputs and labor are substitute inputs. U.S. sectoral data suggest that labor and intermediates are substitutes in service sectors. Therefore, a calibrated model that then also matches each country's production network can quantitatively generate the empirical patterns. The model also explains why service-oriented countries are less volatile: service sectors have a more diversified set of suppliers. (C) 2020 Elsevier Inc. All rights reserved.}, keywords = {VOLATILITY; input-output structure; elasticity of substitution; Service share}, year = {2021}, eissn = {1096-6099}, pages = {146-173} } @article{MTMT:31761497, title = {The La Marca model revisited: Structuralist goodwin cycles with evolutionary supply side and balance of payments constraints}, url = {https://m2.mtmt.hu/api/publication/31761497}, author = {Spinola, Danilo}, doi = {10.1111/meca.12316}, journal-iso = {METROECONOMICA}, journal = {METROECONOMICA: INTERNATIONAL REVIEW OF ECONOMICS}, volume = {72}, unique-id = {31761497}, issn = {0026-1386}, abstract = {This research is aimed at investigating the causes of volatility that affect middle-income countries by studying the La Marca model. Drawing from the open-economy Goodwin tradition, this model demonstrates that economic activity, income distribution and accumulation of foreign assets dynamically interact, resulting in a pattern of dampened cycles. The study consists in analyzing the characteristics of the model by initially imposing: (I) a constant real exchange rate; (II) a constant net external asset to capital ratio, which is in line with the balance of payments dominance theory and (III) a fixed income distribution. We then (IV) expand the original model by adding an evolutionary supply-side in which productivity is at the center of the economic dynamic through international technology transfer and the Kaldor-Verdoorn effect. The results show that (1) the model always converges. (2) The restrictions (I) and (II) remove the cyclical component of the model, which highlights a central difference between La Marca and the original Goodwin model. (3) Fixed income distribution leads to a monotonic trajectory that reduces oscillations. (4) The inclusion of productivity dynamics generates new sources of volatility in the relationship between productivity, capacity utilization and net external assets and is in line with the structuralist argument of structural fragility.}, keywords = {Structuralism; growth cycles; Kaldor-Verdoorn; macroeconomic dynamics}, year = {2021}, eissn = {1467-999X}, pages = {189-212} } @article{MTMT:32320153, title = {Overcoming the "Solow paradox": Tariff reduction and productivity growth of Chinese ICT firms}, url = {https://m2.mtmt.hu/api/publication/32320153}, author = {Zhang, Hongsheng and Wei, Yueling and Ma, Shuzhong}, doi = {10.1016/j.asieco.2021.101316}, journal-iso = {J ASIAN ECON}, journal = {JOURNAL OF ASIAN ECONOMICS}, volume = {74}, unique-id = {32320153}, issn = {1049-0078}, abstract = {This paper examines the phenomenon of the "Solow paradox" in China using the Annual Survey of Industrial Production database and the China Customs Records dataset from 1998 to 2007. We find that China likely fell into the Solow paradox in the period 1998-2002, but the total factor productivity of information and communication technology (ICT) enterprises has achieved rapid growth since 2003. Accession to the World Trade Organization is the key reason for China to overcome the Solow paradox, that is, input tariff reduction significantly promoted the productivity of ICT firms. A series of validity and robustness checks confirmed the results. Mechanism analysis shows that input liberalization promotes the productivity of ICT firms through optimizing factor structure, importing more and high-quality inputs, and increasing research and development investment. The conclusions provide strong empirical evidence for developing countries to overcome the Solow paradox through trade liberalization.(c) 2021 Elsevier Inc. All rights reserved.}, keywords = {TFP; ICT industry; import liberalization; Solow paradox}, year = {2021}, eissn = {1873-7927} } @article{MTMT:31450744, title = {SIZE AND SECTORAL SPECIALISATION. THE ASYMMETRIC CROSS-COUNTRY IMPACTS OF THE 2008 CRISIS AND ITS AFTERMATH}, url = {https://m2.mtmt.hu/api/publication/31450744}, author = {Armstrong, Harvey W. and Read, Robert}, doi = {10.1002/jid.3482}, journal-iso = {J INT DEV}, journal = {JOURNAL OF INTERNATIONAL DEVELOPMENT}, volume = {32}, unique-id = {31450744}, issn = {0954-1748}, abstract = {This paper analyses the cross-country impacts of the 2008 global financial crisis and the subsequent recovery process, with a specific focus on small economies. Key growth volatility variables highlight the critical exposure of small economies to the transmission of exogenous shocks owing to their high degrees of trade openness and inherent output and export specialisation, notably in financial services and tourism. These factors also constrain the mitigation of exogenous shocks giving rise to greater growth volatility. The paper demonstrates systematic asymmetries between countries with respect to the impact of the crisis and its persistence according to their size and patterns of sectoral specialisation. Small tourism-dependent economies and nonsovereign entities were particularly adversely affected although an offshore financial sector partly mitigated the impacts. The robustness of the findings is examined further in the appendix with regard to truncation problems arising from the use of international datasets. (c) 2020 John Wiley & Sons, Ltd.}, keywords = {Cluster Analysis; global crisis; Services sector; Growth volatility; economic shocks; country size; sectoral specialisation}, year = {2020}, eissn = {1099-1328}, pages = {891-921} } @article{MTMT:32955091, title = {Sub-prime Crisis or COVID-19: A Comparative Analysis of Volatility in Indian Banking Sectoral Indices}, url = {https://m2.mtmt.hu/api/publication/32955091}, author = {Bhatia, Parul and Gupta, Priya}, doi = {10.1177/2319714520972210}, journal-iso = {FIIB Business Review}, journal = {FIIB Business Review}, volume = {9}, unique-id = {32955091}, issn = {2319-7145}, abstract = {Stock market volatility may be a function of company, industry, or world over information made public. The present study has investigated the volatility of Indian banking sectoral indices with the general banking index for two shocking events: the Sub-prime crisis and COVID-19. A comparative analysis of both the shocks leading to these indices' volatility has been conducted using symmetric and asymmetric models. This study's findings show that these indices' volatile behaviour has been strong enough to persist in the market with the leverage effect present during the sub-prime crisis. This effect disappeared for Nifty Bank Indices and Private Sector Bank Indices as compared to Public Sector Undertaking Bank Indices during COVID-19 (probably because the pandemic is not over yet). With GARCH and EGARCH models, the study suggests that the investors may use the diversification approach, in the long run, to safeguard their portfolio values to survive from global shocks.}, keywords = {VOLATILITY; banking; Public; private; COVID-19; Sub-prime}, year = {2020}, eissn = {2455-2658}, pages = {286-299}, orcid-numbers = {Bhatia, Parul/0000-0002-2687-8474; Gupta, Priya/0000-0002-4033-6188} } @article{MTMT:31450737, title = {Volatility and economic growth in the twentieth century}, url = {https://m2.mtmt.hu/api/publication/31450737}, author = {Campi, Mercedes and Duenas, Marco}, doi = {10.1016/j.strueco.2019.04.008}, journal-iso = {STRUCT CHANGE ECON DYNAM}, journal = {STRUCTURAL CHANGE AND ECONOMIC DYNAMICS}, volume = {53}, unique-id = {31450737}, issn = {0954-349X}, abstract = {This paper analyses the international distribution of GDP per capita growth rates and its dynamics during the twentieth century. We show that the century is characterized by a changing distribution of GDP per capita growth rates, which is reflected in different shapes and a persistent asymmetry at the regional level and for countries of different development levels. Interestingly, the well-known negative scaling relation between growth volatility and country size that characterizes the second half of the century is not observed before the 1950s, period dominated by severe global shocks. We discuss possible explanations to the disruption of the scaling relationship. We argue that in a turbulent context, the functioning and interdependence of economic components of countries of different size can be altered, also affecting the scaling relation between growth volatility and country size. Our results contribute with evidence of the underlying complexity of the growth process and its historical evolution. (C) 2019 Elsevier B.V. All rights reserved.}, keywords = {economic growth; economic history; Scaling effects; twentieth century; Growth volatility; Growth rates distribution}, year = {2020}, eissn = {1873-6017}, pages = {330-343} } @article{MTMT:31450741, title = {Diversification through trade}, url = {https://m2.mtmt.hu/api/publication/31450741}, author = {Caselli, F and Koren, Miklós and Lisicky, M and Tenreyro, S}, doi = {10.1093/qje/qjz028}, journal-iso = {Q J ECON}, journal = {QUARTERLY JOURNAL OF ECONOMICS}, volume = {135}, unique-id = {31450741}, issn = {0033-5533}, abstract = {A widely held view is that openness to international trade leads to higher income volatility, as trade increases specialization and hence exposure to sector-specific shocks. Contrary to this common wisdom, we argue that when country-wide shocks are important, openness to international trade can lower income volatility by reducing exposure to domestic shocks and allowing countries to diversify the sources of demand and supply across countries. Using a quantitative model of trade, we assess the importance of the two mechanisms (sectoral specialization and cross-country diversification) and show that in recent decades international trade has reduced economic volatility for most countries.}, year = {2020}, eissn = {1531-4650}, pages = {449-502} } @article{MTMT:31761495, title = {Inflation and Output Volatility: Evidence from International Historical Data}, url = {https://m2.mtmt.hu/api/publication/31761495}, author = {Coric, Bruno}, doi = {10.1093/cesifo/ifaa002}, journal-iso = {CESIFO ECON STUD}, journal = {CESIFO ECONOMIC STUDIES}, volume = {66}, unique-id = {31761495}, issn = {1610-241X}, abstract = {This study adopts a historical perspective to investigate variations in output volatility within and across world economies. The analysis uses annual data for 37 OECD and non-OECD countries covering the last two centuries. We focus on the relationship between inflation and output volatility. The results of a panel analysis show a positive effect of inflation on output volatility. This finding is consistent with the view that low inflation has a stabilizing effect on output volatility over the long term.}, keywords = {INFLATION; Business Cycle; economic disasters}, year = {2020}, eissn = {1612-7501}, pages = {157-180} } @article{MTMT:31450742, title = {Export decision under risk}, url = {https://m2.mtmt.hu/api/publication/31450742}, author = {De Sousa, Jose and Disdier, Anne-Celia and Gaigne, Carl}, doi = {10.1016/j.euroecorev.2019.103342}, journal-iso = {EUR ECON REV}, journal = {EUROPEAN ECONOMIC REVIEW}, volume = {121}, unique-id = {31450742}, issn = {0014-2921}, abstract = {We show that economic uncertainty in foreign markets affects firms' economic decisions, particularly those of the most productive firms. Using export data at both the industry and firm levels, we uncover two empirical regularities. First, demand uncertainty in foreign markets affects export entry/exit decisions (extensive margin) and export sales (intensive margin). If all destination countries exhibited the lowest volatility observed across destinations, then total French exports would rise by approximately 18% (an increase primarily driven by the extensive margin). Second, the most productive exporters are more affected by a higher industry-wide expenditure volatility than are the least productive exporters. The 25% most productive firms export, on average, 27% more in value than the 25% least productive firms in less volatile markets, while this difference decreases to 12% in the most volatile markets. (C) 2019 Elsevier B.V. All rights reserved.}, keywords = {demand uncertainty; SKEWNESS; Firm exports; Expenditure volatility}, year = {2020}, eissn = {1873-572X} } @article{MTMT:31396228, title = {Does economic complexity reduce output volatility in developing countries?}, url = {https://m2.mtmt.hu/api/publication/31396228}, author = {Güneri, Barbaros and Yalta, A. Yasemin}, doi = {10.1111/boer.12257}, journal-iso = {B ECON RES}, journal = {BULLETIN OF ECONOMIC RESEARCH}, volume = {73}, unique-id = {31396228}, issn = {0307-3378}, year = {2020}, eissn = {1467-8586}, orcid-numbers = {Güneri, Barbaros/0000-0003-1341-9380; Yalta, A. Yasemin/0000-0002-9854-9813} } @article{MTMT:31450736, title = {Export Quality in Advanced and Developing Economies: Evidence from a New Data Set}, url = {https://m2.mtmt.hu/api/publication/31450736}, author = {Henn, Christian and Papageorgiou, Chris and Romero, Jose Manuel and Spatafora, Nikola}, doi = {10.1057/s41308-020-00110-8}, journal-iso = {IMF ECON REV}, journal = {IMF ECONOMIC REVIEW}, volume = {68}, unique-id = {31450736}, issn = {2041-4161}, abstract = {This paper develops new estimates of export quality, based on bilateral data, which are far more extensive than previous efforts. The data cover 166 countries and more than 800 products over the period 1962-2014. The analysis finds that, within any given product line, export quality on average converges rapidly across countries. However, there is also significant cross-country heterogeneity in the growth rate of quality. Institutional quality, liberal trade policies, foreign direct investment inflows, and human capital all promote quality upgrading, although their impacts vary across sectors.}, keywords = {O14; F14; L15; O11}, year = {2020}, eissn = {2041-417X}, pages = {421-451} } @article{MTMT:31761496, title = {Capital Budgeting and Risk Taking Under Credit Constraints}, url = {https://m2.mtmt.hu/api/publication/31761496}, author = {Iachan, Felipe S.}, doi = {10.1287/mnsc.2019.3369}, journal-iso = {MANAGE SCI}, journal = {MANAGEMENT SCIENCE}, volume = {66}, unique-id = {31761496}, issn = {0025-1909}, abstract = {Limited external financing creates a hedging motive that distorts resource allocation for investment projects. I study these distortions through a dynamic model with endogenous collateral constraints. The hedging motive can be broken into three components: expected future productivity, leverage capacity, and current net worth. Although constrained firms behave as if averse to transitory fluctuations in net worth, they can endogenously pursue increased exposure to both persistent factors that predict future productivity and fluctuations in credit tightness. The most constrained firms abstain from financial hedging, while still distorting capital-allocation decisions, thereby influencing firm- level volatility. These distortions contribute to a potential explanation for the negative cross- sectional relationship between volatility and net worth.}, keywords = {INVESTMENT; Project selection; Credit constraints; capital budgeting; Risk exposure}, year = {2020}, eissn = {1526-5501}, pages = {4292-4314} } @article{MTMT:31450733, title = {Output volatility, composition of trade, and transmission of economic shocks across countries}, url = {https://m2.mtmt.hu/api/publication/31450733}, author = {Karim, Ridwan and Stoyanov, Andrey}, doi = {10.1111/roie.12465}, journal-iso = {REV INT ECON}, journal = {REVIEW OF INTERNATIONAL ECONOMICS}, volume = {28}, unique-id = {31450733}, issn = {0965-7576}, abstract = {In this paper we investigate how supply and demand shocks in one country affect output volatility in other countries. While the evidence for cross-country transmission of demand shocks is mixed, we find that volatile supply in one country leads to larger imports and output volatility in other countries. As a result, the effect of trade openness on output volatility is highly heterogeneous across countries and depends on the composition of their trade. Those countries whose imports originate in economies with volatile supply experience a greater impact of trade on output volatility.}, year = {2020}, eissn = {1467-9396}, pages = {626-655} } @article{MTMT:31450740, title = {Volatility in the small and in the large: The lack of diversification in international trade}, url = {https://m2.mtmt.hu/api/publication/31450740}, author = {Kramarz, Francis and Martin, Julien and Mejean, Isabelle}, doi = {10.1016/j.jinteco.2019.103276}, journal-iso = {J INT ECON}, journal = {JOURNAL OF INTERNATIONAL ECONOMICS}, volume = {122}, unique-id = {31450740}, issn = {0022-1996}, abstract = {How does international trade affect the risk exposure of firms and countries? Trade induces specialization, thus increasing economies' exposure to idiosyncratic supply shocks. But greater geographic diversification in trade destinations offers natural hedging properties against demand shocks. In this paper, we offer an integrated economic and econometric view of the impact of trade on firms and countries volatility. Exporters' volatility is shown to directly depend on the (lack of) diversification in their portfolio of clients. Indeed, most exporters, including the largest, have one or two main clients that dwarf the others. This structure of trade networks implies that individual exporters are strongly exposed to microeconomic demand shocks. The concentration of trade flows further implies that such risk does not wash out across firms, thus contributing to aggregate fluctuations. (C) 2019 The Authors. Published by Elsevier B.V.}, year = {2020}, eissn = {1873-0353} } @article{MTMT:31450746, title = {Competition and Operating Volatilities around the World}, url = {https://m2.mtmt.hu/api/publication/31450746}, author = {Makaew, Tanakorn and Maksimovic, Vojislav}, doi = {10.1017/S002210901800159X}, journal-iso = {J FINANC QUANT ANAL}, journal = {JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS}, volume = {55}, unique-id = {31450746}, issn = {0022-1090}, abstract = {Numerous papers have shown that developing economies are more volatile. We show that, despite greater aggregate and industry stability, performance and size of individual firms in developed countries are more volatile. In developing countries, market imperfections insulate incumbent firms from competition. Consistent with this, firms in developing countries have higher profit, higher market concentration, and less capital raising. Cross-country differences in operating risk and competition intensity are greater in industries that are dependent on external finance, where we expect higher impacts of capital-market imperfections. We show the inverse relation between aggregate and firm-level volatilities has important implications for international studies of cash holding.}, year = {2020}, eissn = {1756-6916}, pages = {517-547} } @article{MTMT:31450735, title = {Input-Output Linkages and Sectoral Volatility}, url = {https://m2.mtmt.hu/api/publication/31450735}, author = {Olabisi, Michael}, doi = {10.1111/ecca.12327}, journal-iso = {ECONOMICA}, journal = {ECONOMICA}, volume = {87}, unique-id = {31450735}, issn = {0013-0427}, abstract = {Why are some sectors more volatile than others? This paper uncovers evidence of an empirical regularity in the US economy: upstream sectors that are far removed from final consumers have higher levels of output volatility. The relationship between volatility and upstreamness is not driven by sector size, sector concentration, trade openness or the level of aggregation at which sectors are defined. Rather, the paper shows a stronger link between upstreamness and nominal output volatility, than with indexes of real output volatility. Aggregate exports at the national level also reflect the empirical regularity of higher volatility with upstreamness: Export volatility is higher in economies with trade portfolios dominated by upstream sectors. On average, reducing the upstreamness of exports by 1 also reduces aggregate export volatility by about 10%. The pattern of higher volatility for upstream sectors is explained with a model of demand shock transmission between sectors.}, year = {2020}, eissn = {1468-0335}, pages = {713-746} } @article{MTMT:31761494, title = {Volatility drivers on the metal market and exposure of producing countries}, url = {https://m2.mtmt.hu/api/publication/31761494}, author = {Renner, Sven and Wellmer, Friedrich W.}, doi = {10.1007/s13563-019-00200-8}, journal-iso = {Mineral Economics}, journal = {Mineral Economics}, volume = {33}, unique-id = {31761494}, issn = {2191-2203}, abstract = {The paper focuses on minor metals and coupled elements and aspires to understand individual incidents of imbalance on the mineral markets during the last 100 years and gain insight into the acting dynamics-those dynamics are commodity-specific but remain largely unchanged in their nature to date-and to identify the factors in play. The conclusions allow for a critical analysis of the widespread security-of-supply narrative of industrialized countries. They point at a market that is mostly a buyers' market, in which prices and their volatility are largely dictated by shifting demand patterns and much less by supply constraints. Neither high country concentration nor poor governance seem to have a substantial or lasting impact on market balance. Short-term market imbalances are generally neutralized by a dynamic reaction on the demand side via substitution, efficiency gains or technological change. The paper also assesses the impact of those quickly shifting demand patterns and the related price volatilities on producing countries. It shows how mineral price volatilities can expose developing countries' economies to significant economic risk, if their economy is heavily dependent on mineral production. Two cases that illustrate country exposure are explored in detail-the saltpeter crisis in Chile and the tin crisis in Bolivia. Both led to state bankruptcy. The paper concludes with an attempt to quantify economic exposure of producing countries to price volatilities of specific metals and suggests policies that adapt to the characteristic challenges of highly volatile demand.}, keywords = {Raw materials; METALS; MINERALS; SUBSTITUTION; VOLATILITY; Low-income countries}, year = {2020}, pages = {311-340} } @article{MTMT:31073950, title = {Comparison of Business Environments in Oil-Rich MENA Countries: A Clustering Analysis of Economic Diversification and Performance}, url = {https://m2.mtmt.hu/api/publication/31073950}, author = {Aker, Sule L. and Aghaei, Iman}, doi = {10.1080/1540496X.2018.1537185}, journal-iso = {EMERG MARK FINANC TR}, journal = {EMERGING MARKETS FINANCE AND TRADE}, volume = {55}, unique-id = {31073950}, issn = {1540-496X}, abstract = {The purpose of present research is to cluster 11 oil-richest MENA countries; Algeria, Egypt, Iran, Iraq, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Sudan, and the United Arab Emirates regarding economic diversification and performance during 2010-2016 using K-means algorithm which is a versatile data mining technique. The major finding is that higher export diversity in addition to better economic performance can influence competitiveness of business environment of the countries positively and vice versa. The studied nations are partitioned into four clusters. Qatar and UAE with highest economic diversity and performance have the most favorable business environments in the region.}, keywords = {economic performance; K-Means clustering algorithm; Business environment; MENA countries; Economic diversification}, year = {2019}, eissn = {1558-0938}, pages = {2871-2885} } @article{MTMT:31073953, title = {Oil Discovery, Political Institutions and Economic Diversification}, url = {https://m2.mtmt.hu/api/publication/31073953}, author = {Alsharif, Nouf and Bhattacharyya, Sambit}, doi = {10.1111/sjpe.12202}, journal-iso = {SCOT J POLIT ECON}, journal = {SCOTTISH JOURNAL OF POLITICAL ECONOMY}, volume = {66}, unique-id = {31073953}, issn = {0036-9292}, abstract = {Diversification is touted as a desirable policy objective for oil-rich nations because it reduces exposure to volatility. However, the empirical relationship between petroleum and diversification is not well understood. Here, we test the effect of giant oil discoveries on diversification using a panel dataset of 136 countries observed over the period from 1962 to 2012. We notice non-oil sector export concentration 8 years after a discovery. However, we do not observe any effect on the structure of employment in non-resource and manufacturing sectors. Democratic political institutions moderate the export and employment concentration effects of petroleum discovery.}, year = {2019}, eissn = {1467-9485}, pages = {459-488} } @article{MTMT:31073955, title = {Export take-offs and acceleration: Unpacking cross-sector linkages in the evolution of comparative advantage}, url = {https://m2.mtmt.hu/api/publication/31073955}, author = {Bahar, Dany and Rosenow, Samuel and Stein, Ernesto and Wagner, Rodrigo}, doi = {10.1016/j.worlddev.2018.12.016}, journal-iso = {WORLD DEV}, journal = {WORLD DEVELOPMENT: THE MULTI-DISCIPLINARY INTERNATIONAL JOURNAL DEVOTED TO THE STUDY AND PROMOTION OF WORLD DEVELOPMENT}, volume = {117}, unique-id = {31073955}, issn = {0305-750X}, abstract = {The transition into non-traditional export activities attracts important policy and academic attention. Using international trade data, we explore how alternative linkages relate to the take-off and acceleration of export industries. Concretely, we run a horse-race among alternative Marshallian linkages across sectors: input-output relations, technology and labor. Technology has a predictive power depending on the specification used. We consistently find, however, that export take-offs are more likely to occur in sectors that are upstream to already competitive export industries. Our findings, which are mostly driven by developing economies, are consistent with Albert Hirschman's 60-year-old view that the forces behind upstream linkages fueled the growth of new competitive industries in the developing world. (C) 2019 Elsevier Ltd. All rights reserved.}, keywords = {Patents; relatedness; labor; DOWNSTREAM; Comparative advantage; upstream}, year = {2019}, eissn = {1873-5991}, pages = {48-60} } @article{MTMT:31073946, title = {The volatility of world trade in the 21st century: Whose fault is it anyway?}, url = {https://m2.mtmt.hu/api/publication/31073946}, author = {Bennett, Federico and Lederman, Daniel and Pienknagura, Samuel and Rojas, Diego}, doi = {10.1111/twec.12826}, journal-iso = {WORLD ECON}, journal = {WORLD ECONOMY}, volume = {42}, unique-id = {31073946}, issn = {0378-5920}, abstract = {This paper explores the drivers of the volatility of international trade. It decomposes trade growth into six components that have gained attention in the literature and studies their contribution to overall volatility. It yields three main findings. First, trade volatility in the 1990-2015 period is mostly explained by a common factor, changes in the gravity-related characteristics of a country's trading partners and country-specific factors. Product composition and the identity of trading partners appear to be less important in explaining volatility. Second, the pre-2009 decline in volatility and the post-2009 increase in volatility appear to be driven by different factors. The former is mostly explained by a decline in the variance of country-specific factors; the latter appears to be driven by an increase in the volatility of common factors. Third, diversification is a likely force behind the steady decline in the volatility stemming from country-specific factors, especially in developing countries.}, keywords = {economic development; VOLATILITY; trade liberalisation}, year = {2019}, eissn = {1467-9701}, pages = {2508-2545}, orcid-numbers = {Pienknagura, Samuel/0000-0002-7448-4971} } @article{MTMT:31073942, title = {On Growth Projections in the Shared Socioeconomic Pathways}, url = {https://m2.mtmt.hu/api/publication/31073942}, author = {Buhaug, Halyard and Vestby, Jonas}, doi = {10.1162/glep_a_00525}, journal-iso = {GLOBAL ENVIRON POLIT}, journal = {GLOBAL ENVIRONMENTAL POLITICS}, volume = {19}, unique-id = {31073942}, issn = {1526-3800}, abstract = {The recently developed Shared Socioeconomic Pathways (SSPs) have enabled researchers to explore coupled human-nature dynamics in new and more complex ways. Despite their wide applicability and unquestionable advantage over earlier scenarios, the utility of the SSPs for conducting societal impact assessments is impaired by shortcomings in the underlying economic growth projections. In particular, the assumed economic convergence and absence of major growth disruptions break with historical growth trajectories in the developing world. The consequence is that the SSP portfolio becomes too narrow, with an overly optimistic lower band of growth projections. This is not a trivial concern, since resulting impact assessments are likely to underestimate the full human and material costs of climate change, especially for the poorest and most vulnerable societies. In response, we propose that future quantifications of the SSPs should incorporate the likelihood of growth disruptions, informed by scenarios of the relevant political contexts that historically have been important in curbing growth.}, year = {2019}, eissn = {1536-0091}, pages = {118-132} } @article{MTMT:31073948, title = {DEINDUSTRIALIZATION OF SUB-SAHARAN AFRICA}, url = {https://m2.mtmt.hu/api/publication/31073948}, author = {Clark, Don}, doi = {10.1142/S2194565919500015}, journal-iso = {GLOBAL ECON J}, journal = {GLOBAL ECONOMY JOURNAL}, volume = {19}, unique-id = {31073948}, issn = {2194-5659}, abstract = {Sub-Saharan African (SSA) countries as a group have been deindustrializing for more than three decades. Logistic growth functions of the share of manufacturing value added in Gross Domestic Product (GDP) provide estimates of the rate at which the manufacturing sector has diffused into each SSA economy. Deindustrializers (industrializers) have negative (positive) manufacturing sector diffusion rates. Sixteen SSA countries experienced significant deindustrialization. Factors associated with deindustrialization trends are identified. Countries with low real per capita incomes and those unable to diversify their manufacturing base, expand production for export, or export sophisticated products more frequently experienced deindustrialization. These countries also had relatively low gross capital formation and educational expenditure shares of GDP. Starting with a small manufacturing base does not appear to constrain the industrialization process. Excessive reliance on minerals production did not encourage deindustrialization. Policies are identified that will help countries avoid deindustrialization.}, keywords = {economic development; Manufacturing diffusion rates; deindustrialization determinants; industrialization policies}, year = {2019}, eissn = {1553-5304} } @article{MTMT:31073941, title = {Trade, poverty, and social protection in developing countries}, url = {https://m2.mtmt.hu/api/publication/31073941}, author = {Desai, Raj M. and Rudra, Nita}, doi = {10.1016/j.ejpoleco.2018.08.008}, journal-iso = {EUR J POLIT ECON}, journal = {EUROPEAN JOURNAL OF POLITICAL ECONOMY}, volume = {60}, unique-id = {31073941}, issn = {0176-2680}, abstract = {How do shifts in trade affect social protections for the poor? Although the fraction of the world's population considered the "extreme" poor has fallen by over one-half over the past quarter century, many of those lifted above the global poverty line remain vulnerable to shocks that could place them back into poverty. These are the groups that require social protection to stabilize their incomes. Among the shocks to which the absolute poor have been exposed are those created by trade liberalization, particularly of the agricultural sector. The resulting risks, uncertainties, and threats to social stability from this type of trade require that the poor be provided with some forms of adjustment assistance. We examine the effects of trade components on several dimensions of social protection in developing countries, including spending, coverage, and adequacy over the past two decades. We find that, contrary to previous studies, disaggregating trade may be a key to determining which international market variables drive expansion of social protection. Disaggregating trade balances in agricultural vs. manufactured goods reveals that net food and agricultural exporters provide better social protection than countries that report agricultural trade deficits. Meanwhile, countries with manufacturing trade surpluses tend to experience reduced social protection coverage. We reason that governments of net agricultural exporters face incentives to invest in social programs that extend eligibility to the rural poor. Manufacturing export-driven economies, on the other hand, are likely participants in global production chains that limit the capacity of the public sector to extend social protection.}, keywords = {globalization; TRADE; social protection}, year = {2019}, eissn = {1873-5703} } @article{MTMT:31073958, title = {Multilateral trade liberalization and developing countries' economic exposure to shocks}, url = {https://m2.mtmt.hu/api/publication/31073958}, author = {Gnangnon, Sena Kimm}, doi = {10.1108/JES-05-2017-0141}, journal-iso = {J ECON STUD}, journal = {JOURNAL OF ECONOMIC STUDIES}, volume = {46}, unique-id = {31073958}, issn = {0144-3585}, abstract = {Purpose - The purpose of this paper is to examine the impact of multilateral trade policy (MTP) liberalization on developing countries' economic exposure to shocks.Design/methodology/approach - The analysis is conducted on a panel data set comprising 120 countries over the period 1996-2013 and uses the within fixed effects estimator.Findings - The empirical results suggest that over the entire sample as well as sub-samples of least developed countries (LDCs) and non-LDCs, multilateral trade liberalization have a negative and significant impact on economic exposure to shocks. Interestingly, LDCs appear to experience the highest magnitude of the reducing impact of multilateral trade liberalization on countries' economic exposure to shocks.Research limitations/implications - These findings suggest that a greater cooperation among countries in the world, including among WTO members to further liberalize trade would surely contribute to reducing developing countries' economic exposure to shocks.Practical implications - The current study shows that the current backlash against trade and the consequent strong appeal for domestic trade protectionist measures would likely to undermine the likelihood of further multilateral trade liberalization. One implication of this could be a rise in countries' economic exposure to shocks.Originality/value - To the best of the author's knowledge, this is first the study on this matter.}, keywords = {Developing Countries; Multilateral trade liberalization; Economic exposure to shocks}, year = {2019}, eissn = {1758-7387}, pages = {496-515} } @article{MTMT:31073943, title = {Tax Reform and Public Revenue Instability in Developing Countries. Does the Volatility of Development Aid Matter?}, url = {https://m2.mtmt.hu/api/publication/31073943}, author = {Gnangnon, Sena Kimm and Brun, Jean-Francois}, doi = {10.1002/jid.3436}, journal-iso = {J INT DEV}, journal = {JOURNAL OF INTERNATIONAL DEVELOPMENT}, volume = {31}, unique-id = {31073943}, issn = {0954-1748}, abstract = {This paper examines the relationship between tax transition reform, development aid volatility, and public revenue instability in developing countries. Empirical findings show that tax reform exerts a negative effect on tax revenue instability, and the magnitude of this negative effect diminishes as the degree of development aid volatility increases. Specifically, beyond a certain level of development aid volatility, tax reform enhances tax revenue instability. Overall, these findings suggest that higher development aid flows to developing countries should be accompanied by a lower aid volatility so as to ensure that tax reform would generate lower tax revenue instability in recipient countries. (c) 2019 John Wiley & Sons, Ltd.}, keywords = {Developing Countries; tax reform; public revenue instability; development aid volatility}, year = {2019}, eissn = {1099-1328}, pages = {764-785} } @article{MTMT:31073944, title = {Natural resources curse: A reality in Africa}, url = {https://m2.mtmt.hu/api/publication/31073944}, author = {Henri, Pr Atangana Ondoa}, doi = {10.1016/j.resourpol.2019.101406}, journal-iso = {RESOUR POL}, journal = {RESOURCES POLICY}, volume = {63}, unique-id = {31073944}, issn = {0301-4207}, abstract = {The objective of this study is to identify the institutional and economic indicators that are more negatively affected by natural resource rents in Africa. For this purpose, it used the two-stage least squares (2SLS) and data of the World bank (WDI and WGI) for the period 1992-2016. The results show that the most institutional problems caused by natural resources rents are by order: corruption; problem of rule of law or justice; inefficient public administrations; bad regulation; lack of voice and accountability; political instability. Natural resources rents also cause volatility of GDP per capita, leading to low level of physical and human capital accumulation. For these reasons, African countries should promote good governance and diversify their economies.}, keywords = {Africa; natural; Curse and resource}, year = {2019}, eissn = {1873-7641} } @article{MTMT:31073957, title = {Do (all) sectoral shocks lead to aggregate volatility? Empirics from a production network perspective}, url = {https://m2.mtmt.hu/api/publication/31073957}, author = {Joya, Omar and Rougier, Eric}, doi = {10.1016/j.euroecorev.2019.01.004}, journal-iso = {EUR ECON REV}, journal = {EUROPEAN ECONOMIC REVIEW}, volume = {113}, unique-id = {31073957}, issn = {0014-2921}, abstract = {Productive diversification has long been acknowledged as a volatility-reducing strategy. Yet, recent theoretical contributions have shown that, in strongly diversified economies, idiosyncratic shocks could translate into aggregate volatility via the network of inter-industry linkages. By exploiting exogenous cross-country-sector variations in demand shocks during the 2008 Great Recession, we provide empirical evidence that the network properties of a sector affected by an individual shock determine its propensity to transmit volatility to the rest of the economy. More precisely, shocks to sectors that are located in denser parts of a production network fade out over a large number of alternative paths of propagation due to substitution effects, whereas shocks to sectors that are more influential within the network generate aggregate fluctuations through contagion effects. We also find that the impact of sectoral shocks on aggregate volatility (1) is not conditional on sector-level differences in trade intensity, and (2) is larger for developing countries because they tend to have more isolated influential sectors and larger structural holes in their production network. Our results thus help consolidate the two opposite views in the literature on the impact of productive diversification on aggregate volatility. (C) 2019 Elsevier B.V. All rights reserved.}, keywords = {DIVERSIFICATION; VOLATILITY; Production network; input-output structure; Sectoral shock; 2008 global crisis}, year = {2019}, eissn = {1873-572X}, pages = {77-107}, orcid-numbers = {Rougier, Eric/0000-0003-0466-0607} } @article{MTMT:31073951, title = {Occupation-induced status, social norms, and economic growth}, url = {https://m2.mtmt.hu/api/publication/31073951}, author = {Kontogiannis, Nikolaos and Litina, Anastasia and Varvarigos, Dimitrios}, doi = {10.1016/j.jebo.2019.04.027}, journal-iso = {J ECON BEHAV ORGAN}, journal = {JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION}, volume = {163}, unique-id = {31073951}, issn = {0167-2681}, abstract = {We analyse a monetary growth model where entrepreneurs borrow funds to invest in projects that produce capital goods. In addition to their varying pecuniary returns, different projects also vary with respect to the status they confer to the entrepreneurs who operate them. We show that (i) social status increases the growth rate, but this effect is mitigated by a social norm that inversely links overall levels of employment in the high return project with the status conferred to it; (ii) the combined effect of social status and inflation is a source of transitional dynamics in an environment where such dynamics would not emerge if considerations of occupational prestige were absent; (iii) when the social norm affects social status, the economy's dynamics may be manifested in the form of endogenous volatility; (iv) the presence and characteristics of social status can generate a negative correlation between volatility and growth. (C) 2019 Elsevier B.V. All rights reserved.}, keywords = {NORMS; social status; cycles; economic growth}, year = {2019}, eissn = {1879-1751}, pages = {348-360} } @article{MTMT:31073945, title = {Property rights institutions, foreign investment, and the valuation of multinational firms}, url = {https://m2.mtmt.hu/api/publication/31073945}, author = {Lin, Leming and Mihov, Atanas and Sanz, Leandro and Stoyanova, Detelina}, doi = {10.1016/j.jfineco.2019.03.001}, journal-iso = {J FINANC ECON}, journal = {JOURNAL OF FINANCIAL ECONOMICS}, volume = {134}, unique-id = {31073945}, issn = {0304-405X}, abstract = {We study the effect of property rights institutions in host countries, the institutions protecting investors from expropriation by host country agents, on the geographic structure and valuation of US multinational corporations (MNCs). We provide firm-level evidence that better property rights attract investment from MNCs. We disentangle the effects of the Stulz (2005) "twin agency problems" in the context of foreign direct investment and show that our results are not driven by legal institutions protecting investors from expropriation by corporate insiders. Further, we show that changes in the quality of property rights in locations where MNCs operate have material impact on MNCs' valuations. (C) 2019 Elsevier B.V. All rights reserved.}, keywords = {Foreign direct investment; multinational corporations; Property rights institutions; Investor protection; Firm valuation}, year = {2019}, pages = {214-235} } @article{MTMT:31073952, title = {The growth-volatility relationship redux: what does volatility decomposition tell?}, url = {https://m2.mtmt.hu/api/publication/31073952}, author = {Mallick, Debdulal}, doi = {10.1515/bejm-2018-0076}, journal-iso = {BE J MACROECON}, journal = {B E JOURNAL OF MACROECONOMICS}, volume = {19}, unique-id = {31073952}, issn = {1935-1690}, abstract = {This paper revisits the empirical relationship between volatility and long-run growth, but the key contribution lies in decomposing growth volatility into its business-cycle and trend components. This volatility decomposition also accounts for enormous heterogeneity among countries in terms of their long-run growth trajectories. We identify a negative effect of trend volatility, which we refer to as long-run volatility, on growth, but no effect of business-cycle volatility. However, if long-run volatility is omitted, there would be a spurious (negative) effect of business-cycle volatility. Our results draw attention to a crucial question about different volatility measures and their implications in macroeconomic analyses.}, keywords = {GROWTH; FREQUENCY; VOLATILITY; BUSINESS CYCLES; volatility persistence}, year = {2019}, eissn = {1935-1690} } @article{MTMT:31073954, title = {Foreign banks and short-term macroeconomic fluctuations: Do financial development and regions matter?}, url = {https://m2.mtmt.hu/api/publication/31073954}, author = {Onder, Zeynep and Ozyildirim, Suheyla}, doi = {10.1016/j.ecosys.2018.08.007}, journal-iso = {ECON SYST}, journal = {ECONOMIC SYSTEMS}, volume = {43}, unique-id = {31073954}, issn = {0939-3625}, abstract = {In this paper, we investigate the association between bank integration, measured with the share of foreign banks in the banking industry, and macroeconomic volatility in emerging economies. We find a negative and significant relationship between bank integration and short-run fluctuations in output, consumption and investment, controlling for financial development, bank concentration and the real effective exchange rate. However, this relationship is found to be positive at high levels of financial development. We also explore the association at the regional level and show that the presence of foreign banks in Latin America is negatively and significantly correlated with macroeconomic volatility both in normal times and times of crisis. Despite widespread concerns in emerging Europe, which experienced greater financial vulnerability during the global financial crisis, we find no significant association between growth volatilities and bank integration.}, keywords = {global financial crisis; Financial development; Foreign banks; Bank integration; Macroeconomic volatility}, year = {2019}, eissn = {1878-5433}, pages = {63-76}, orcid-numbers = {Onder, Zeynep/0000-0002-9260-6557} } @article{MTMT:31073947, title = {What do we know about export diversification in oil-producing countries?}, url = {https://m2.mtmt.hu/api/publication/31073947}, author = {Ross, Michael L.}, doi = {10.1016/j.exis.2019.06.004}, journal-iso = {EXTRACT IND SOC}, journal = {EXTRACTIVE INDUSTRIES AND SOCIETY}, volume = {6}, unique-id = {31073947}, issn = {2214-790X}, abstract = {Oil-exporting countries are often advised to diversify their economies, yet surprisingly little is known about how this can be done. Research on this issue has been constrained by missing and inconsistent data, selection bias, and the use of uninformative measures of diversification. This paper uses a novel measure of export concentration from the IMF to describe diversification trends between 1962 and 2010 among the 38 largest oil producers. It documents three empirical patterns: a rising gap in export diversification between oil-producing states and non-oil states; the heightened concentration of exports in most oil and mineral producing states from 1980 to 2010; and the heterogeneous performances of the oil producers over the long run. Four striking patterns stand out: the oil exporters have developed the most narrowly-specialized economies in the global market, making them uniquely vulnerable to price shocks; among the oil exporters, the African states have the poorest diversification record; successful diversification is broadly associated with lower levels of oil wealth, which is consistent with a Dutch Disease effect; and success is not strongly associated with population, government effectiveness or democratic accountability.}, keywords = {Dutch disease; resource curse; Export diversification; Resource wealth; Hydrocarbon wealth; Commodity booms}, year = {2019}, eissn = {2214-7918}, pages = {792-806} } @article{MTMT:31073949, title = {Industrial development in Malaysia and Singapore: Empirical analysis with multiple-cone Heckscher-Ohlin Model}, url = {https://m2.mtmt.hu/api/publication/31073949}, author = {Suzuki, Kensuke and Doi, Yasuhiro}, doi = {10.1111/rode.12595}, journal-iso = {REV DEV ECON}, journal = {REVIEW OF DEVELOPMENT ECONOMICS}, volume = {23}, unique-id = {31073949}, issn = {1363-6669}, abstract = {This paper employs the multiple-cone Heckscher-Ohlin model to analyze industrial development in Malaysia and Singapore. In particular, we focus on industrial upgrading along with capital accumulation as a key determinant for the cross-country difference in production technology and income. By pooling two countries' data on factor endowment and sectoral output in manufacturing from 1990 to 2008, we estimate the common industrial development paths of the two-cone Heckscher-Ohlin model, the Rybczynski linear relationship between capital-labor ratio and sectoral output per capita. Our results demonstrate that, after controlling for quality of workers (by educational attainment), the two countries resided in different cones during our sample period, implying that Singapore succeeded in accumulating capital steadily with the support of foreign investment and upgrading its industry mix to make it more capital-intensive. The separation of cones is also consistent with the observed gap in gross domestic product per capita between the two countries. Furthermore, we implement a factor-augmenting productivity test to see the gaps in efficiency of capital and human-capital-augmented labor and confirm no significant difference between the two countries.}, keywords = {industrial development; Multiple-cone Heckscher-Ohlin model}, year = {2019}, eissn = {1467-9361}, pages = {1414-1431} } @article{MTMT:31073940, title = {Resource Price Fluctuations, Resource Dependence and Sustainable Growth}, url = {https://m2.mtmt.hu/api/publication/31073940}, author = {Wang, Hua and Wang, Shi and Yang, Cheng-Fu and Jiang, Sheng-Nan and Li, Yun-Juan}, doi = {10.3390/su11226371}, journal-iso = {SUSTAINABILITY-BASEL}, journal = {SUSTAINABILITY}, volume = {11}, unique-id = {31073940}, abstract = {The previous literature on the resource curse has not taken resource price fluctuations into account. Using panel data covering the period from 1993 to 2017 from 28 provinces in China and dynamic generalized method of moments (GMM), this article takes a fresh look at the relationship between resource dependence and sustainable economic growth and the potential transmission mechanisms taking resource price fluctuations into consideration. We find that resource price fluctuations represent an important factor when researching the resource curse, and there is a U-shaped relationship between resource dependence and sustainable economic growth. However, over the past 20 years, provinces in China remained on the left of the U-shaped curve, and there is a single negative correlation between resource dependence and sustainable economic growth. This means that resource curse occurs in nearly all provinces in China. The analysis of transmission mechanisms of indirect effects taking resource price fluctuations into consideration shows that human capital investment and physical capital investment are more important than other mechanisms, and there are considerably more indirect effects than direct effects when taking into account the total effects of the resource curse.}, keywords = {resource curse; Sustainable growth; resource price fluctuations}, year = {2019}, eissn = {2071-1050} } @{MTMT:30490309, title = {Natural Resources and Economic Diversification: Evidence from the GCC Countries}, url = {https://m2.mtmt.hu/api/publication/30490309}, author = {Alsharif, Nouf N.}, booktitle = {ECONOMIC DIVERSIFICATION IN THE GULF REGION, VOL II: COMPARING GLOBAL CHALLENGES}, doi = {10.1007/978-981-10-5786-1_2}, unique-id = {30490309}, year = {2018}, pages = {21-49} } @article{MTMT:30490304, title = {The impact of the 2008 global crisis on small economies in the Caribbean}, url = {https://m2.mtmt.hu/api/publication/30490304}, author = {Armstrong, Harvey W. and Read, Robert}, doi = {10.1080/08263663.2018.1513718}, journal-iso = {CAN J LAT AM CAR STUD}, journal = {CANADIAN JOURNAL OF LATIN AMERICAN AND CARIBBEAN STUDIES}, volume = {43}, unique-id = {30490304}, issn = {0826-3663}, abstract = {This paper investigates the impact of the global 2008 crisis on the Caribbean region, with particular focus on its many small tourism-dependent economies. Specialization in tourism and, in some cases, offshore financial services has been a successful specialization strategy for many small economies but has made them highly susceptible to exogenous economic shocks. The paper utilizes cluster analysis to identify five distinct pre-crisis patterns of sectoral specialization in Caribbean economies generally. The 2008 crisis is shown to have had very distinct cluster-specific effects, with small economies specializing in tourism and financial services being the worst affected. These findings raise important questions regarding the future sustainability of this sectoral growth template, previously adopted by many successful small economies.}, keywords = {Cluster Analysis; economic performance; Small economies; Caribbean; global crisis; sectoral specialization; tourism dependence; crisis impact}, year = {2018}, pages = {394-416}, orcid-numbers = {Read, Robert/0000-0002-8001-1900} } @article{MTMT:27520156, title = {One more resource curse: Dutch disease and export concentration}, url = {https://m2.mtmt.hu/api/publication/27520156}, author = {Bahar, Dany and Santos, Miguel A}, doi = {10.1016/j.jdeveco.2018.01.002}, journal-iso = {J DEV ECON}, journal = {JOURNAL OF DEVELOPMENT ECONOMICS}, volume = {132}, unique-id = {27520156}, issn = {0304-3878}, year = {2018}, eissn = {1872-6089}, pages = {102-114} } @article{MTMT:30490316, title = {Openness, specialization, and the external vulnerability of developing countries}, url = {https://m2.mtmt.hu/api/publication/30490316}, author = {Barrot, Luis-Diego and Calderon, Cesar and Serven, Luis}, doi = {10.1016/j.jdeveco.2018.05.015}, journal-iso = {J DEV ECON}, journal = {JOURNAL OF DEVELOPMENT ECONOMICS}, volume = {134}, unique-id = {30490316}, issn = {0304-3878}, abstract = {This paper reassesses the sources of macroeconomic fluctuations across a large sample of developing countries. It employs sign restrictions to identify four external structural shocks - demand, supply, monetary and commodity shocks, and relates their impact to countries' policy and structural framework. External shocks account for a small share of the variance of GDP, especially at short horizons. However, their relative contribution has risen in recent decades, as the incidence of domestic shocks has declined. Global monetary shocks have become the leading external source of GDP volatility in developing countries. At short horizons, real and financial openness raise the share of volatility attributable to external shocks. At longer horizons, financial openness helps reduce the volatility contribution of global real shocks, but not that of global monetary shocks, thus augmenting the relative role of the latter. Commodity-intensive countries exhibit higher vulnerability to all types of external shocks, not just commodity shocks.}, keywords = {VULNERABILITY; External shocks; Sign restrictions}, year = {2018}, eissn = {1872-6089}, pages = {310-328} } @article{MTMT:27520192, title = {Export diversification and economic development: A dynamic spatial data analysis}, url = {https://m2.mtmt.hu/api/publication/27520192}, author = {Basile, Roberto and Parteka, Aleksandra and Pittiglio, Rosanna}, doi = {10.1111/roie.12316}, journal-iso = {REV INT ECON}, journal = {REVIEW OF INTERNATIONAL ECONOMICS}, volume = {26}, unique-id = {27520192}, issn = {0965-7576}, year = {2018}, eissn = {1467-9396}, pages = {634-650} } @article{MTMT:30490308, title = {INSTITUTIONS, VOLATILITY, AND INVESTMENT}, url = {https://m2.mtmt.hu/api/publication/30490308}, author = {Besley, Timothy and Mueller, Hannes}, doi = {10.1093/jeea/jvx030}, journal-iso = {J EUR ECON ASSOC}, journal = {JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION}, volume = {16}, unique-id = {30490308}, issn = {1542-4766}, abstract = {Countries with strong executive constraints have lower growth volatility but similar average growth to those with weak constraints. This paper argues that this may explain the relationship between executive constraints and inflows of foreign investment. It uses a novel dataset of Dutch sector-level investments between 1983 and 2012 to explore this issue. It formulates an economic model of investment and uses data on the mean and variance of productivity growth to explain the relationship between investment inflows and executive constraints. The model can account for the aggregate change in inflows when strong executive constraints are adopted in terms of the reduction in the volatility in productivity growth. The data and model together suggest a natural way of thinking about country-level heterogeneity in investment inflows following the adoption of strong executive constraints.}, year = {2018}, eissn = {1542-4774}, pages = {604-649} } @article{MTMT:27269260, title = {Does higher openness cause more real exchange rate volatility?}, url = {https://m2.mtmt.hu/api/publication/27269260}, author = {Calderon, Cesar and Kubota, Megumi}, doi = {10.1016/j.jinteco.2017.08.002}, journal-iso = {J INT ECON}, journal = {JOURNAL OF INTERNATIONAL ECONOMICS}, volume = {110}, unique-id = {27269260}, issn = {0022-1996}, year = {2018}, eissn = {1873-0353}, pages = {176-204} } @article{MTMT:30490313, title = {The Impact of Regional and Sectoral Productivity Changes on the US Economy}, url = {https://m2.mtmt.hu/api/publication/30490313}, author = {Caliendo, Lorenzo and Parro, Fernando and Rossi-Hansberg, Esteban and Sarte, Pierre-Daniel}, doi = {10.1093/restud/rdx082}, journal-iso = {REV ECON STUD}, journal = {REVIEW OF ECONOMIC STUDIES}, volume = {85}, unique-id = {30490313}, issn = {0034-6527}, abstract = {We study the impact of intersectoral and interregional trade linkages in propagating disaggregated productivity changes to the rest of the economy. Using U.S. regional and industry data, we obtain the aggregate, regional and sectoral elasticities of measured total factor productivity, GDP, and employment to regional and sectoral productivity changes. We find that the elasticities vary significantly depending on the sectors and regions affected, and are importantly determined by the spatial structure of the economy. We use our calibrated model to perform a variety of counterfactual exercises including several specific studies of the aggregate and disaggregate effects of shocks to productivity and infrastructure. The specific episodes we study include the boom in California's computer industry, the productivity boom in North Dakota associated with the shale oil boom, the disruptions in New York's finance and real state industries during the 2008 crisis, as well as the effect of the destruction of infrastructure in Louisiana following hurricane Katrina.}, keywords = {Regional trade; Input-output linkages; Labour mobility; Spatial economics; Economic geography; Regional productivity; Sectoral productivity}, year = {2018}, eissn = {1467-937X}, pages = {2042-2096} } @article{MTMT:27520193, title = {Export characteristics and output volatility: comparative firm-level evidence for CEE countries}, url = {https://m2.mtmt.hu/api/publication/27520193}, author = {Cede, Urska and Chiriacescu, Bogdan and Harasztosi, Peter and Lalinsky, Tibor and Merikull, Jaanika}, doi = {10.1007/s10290-018-0312-x}, journal-iso = {REV WORLD ECON}, journal = {REVIEW OF WORLD ECONOMICS}, volume = {154}, unique-id = {27520193}, issn = {1610-2878}, year = {2018}, eissn = {1610-2886}, pages = {347-376} } @article{MTMT:27520157, title = {Precautionary Fiscal Savings in Resource-Intensive Countries}, url = {https://m2.mtmt.hu/api/publication/27520157}, author = {Cerda, N Rodrigo and Larrain, B Felipe and Larrain, C Felipe}, journal-iso = {TRIMESTRE ECON}, journal = {TRIMESTRE ECONOMICO}, volume = {85}, unique-id = {27520157}, issn = {0041-3011}, year = {2018}, eissn = {0041-3011}, pages = {255-276} } @article{MTMT:27269257, title = {Dispersion in macroeconomic volatility between the core and periphery of the international trade network}, url = {https://m2.mtmt.hu/api/publication/27269257}, author = {Chakrabarti, Anindya S}, doi = {10.1016/j.jedc.2018.01.019}, journal-iso = {J ECON DYN CONTROL}, journal = {JOURNAL OF ECONOMIC DYNAMICS & CONTROL}, volume = {88}, unique-id = {27269257}, issn = {0165-1889}, year = {2018}, eissn = {1879-1743}, pages = {31-50} } @article{MTMT:30490315, title = {Uncertainty, capital flows, and maturity mismatch}, url = {https://m2.mtmt.hu/api/publication/30490315}, author = {Converse, Nathan}, doi = {10.1016/j.jimonfin.2017.07.013}, journal-iso = {J INT MONEY FINANC}, journal = {JOURNAL OF INTERNATIONAL MONEY AND FINANCE}, volume = {88}, unique-id = {30490315}, issn = {0261-5606}, abstract = {This paper explores a how the financial uncertainty generated by volatile international capital flows interacts with maturity mismatch on the balance sheets of nonfinancial firms to increase the volatility of output, investment, and total factor productivity (TFP) in emerging market economies. I build a model of a small open economy in which financial frictions force firms to fund long-term projects with short-term debt. In response to changes in the level of uncertainty regarding the availability of foreign borrowing, firms adjust their long-term investment, contributing to the volatility of investment and output as well as generating endogenous fluctuations in aggregate productivity. Using data from a panel of major emerging markets, I show that the volatility of portfolio debt flows negatively affects output by dampening investment, while the volatility of equity flows, which do not generate maturity mismatch, has no effect. Consistent with the mechanism in the model, the negative impact of capital flow volatility is larger at low levels of financial development and in industries with longer time-to-build lags. My estimates imply that shocks to capital flow volatility account for one fifth of the excess output volatility of the emerging markets in my sample relative to a set of small open advanced economies. (C) 2017 Elsevier Ltd. All rights reserved.}, keywords = {UNCERTAINTY; EMERGING MARKETS; Capital flows; Maturity mismatch; Financial volatility; Capital allocation}, year = {2018}, eissn = {1873-0639}, pages = {260-275} } @article{MTMT:27405498, title = {Power laws in EU country exports}, url = {https://m2.mtmt.hu/api/publication/27405498}, author = {del, Rosal I}, doi = {10.1007/s10663-016-9362-2}, journal-iso = {EMPIRICA}, journal = {EMPIRICA}, volume = {45}, unique-id = {27405498}, issn = {0340-8744}, year = {2018}, eissn = {1573-6911}, pages = {311-337} } @article{MTMT:30490306, title = {Uncertainty, risk aversion and international trade}, url = {https://m2.mtmt.hu/api/publication/30490306}, author = {Gervais, Antoine}, doi = {10.1016/j.jinteco.2018.09.001}, journal-iso = {J INT ECON}, journal = {JOURNAL OF INTERNATIONAL ECONOMICS}, volume = {115}, unique-id = {30490306}, issn = {0022-1996}, abstract = {In this paper, I study the impact of uncertainty in the delivery of inputs on international trade patterns. I develop a model of sourcing decisions where risk-averse managers can contract with multiple suppliers in order to decrease the variability of firm profits. Among other results, the model predicts that firms will buy a larger share of their inputs from low price variability suppliers, and that the distribution of input demand across suppliers will be more dispersed in input markets characterized with high price variability. Econometric evidence suggests that the model is consistent with qualitative features of the data. (C) 2018 Elsevier B.V. All rights reserved.}, keywords = {UNCERTAINTY; international trade; risk aversion; Intermediate inputs; Trade liberalization}, year = {2018}, eissn = {1873-0353}, pages = {145-158} }