Trade similarity across the Mediterranean Basin Bridging the gap: the role of trade and FDI in the Mediterranean Naples, 9 June 2006 Luca De Benedictis.

Slides:



Advertisements
Similar presentations
UNDESA INTERNATIONAL WORKSHOP Bridging the Gap: the Role of Trade and FDI in the Mediterranean NAPLES 2006 JUNE 8-9 Ten years from Barcellona: Evaluation.
Advertisements

Industry-of-Origin Prices and PPPs:
Debt Sustainability and Debt Composition UNCTAD Paper by Heiner Flassbeck and Ugo Panizza.
Cities and Green Growth OECD Green Cities Programme
Trade and Trade Policy A Guide for Commonwealth Parliamentarians Dr Christopher Stevens, Overseas Development Institute Regional Workshop on Trade Policy.
Productivity Perspectives depend on your point of view Eric Bartelsman Vrije Universiteit Amsterdam and Tinbergen Institute Canberra, ABS/PC Dec. 9, 2004.
Towards a quantification of innovation systems Manuel Mira Godinho ISEG/UTLisbon Presentation to the Tampere 5 June 2008.
1 Sub-Saharan Africa and Europe in a restructuring world François Bourguignon and Pierre Jacquet Paris School of Economics and Agence Française de Développement.
Productivity or Employment: Is it a choice? Andrea De Michelis Federal Reserve Board Marcello Estevão International Monetary Fund Beth Anne Wilson Federal.
Technology Diffusion and Income Inequality: how augmented Kuznets hypothesis could explain ICT diffusion? 30 May 2005 Miguel Torres Preto.
Bulent Esiyok 1. Introduction An Overview of Inward FDI in Turkey Previous Empirical Literature: EU effect on FDI in Turkey Research Question and Contributi0n.
1 Equity Price and Equity Flows: Testing Theory of the Information-Efficiency Tradeoff Assaf Razin Anuk Serechetapongse Cornell University June 14 th,
International student movements and the effects of barriers to trade in higher education services Dr Philippa Dee Crawford School of Economics and Government.
EUROPEAN COMMISSION DIRECTORATE GENERAL ECONOMIC AND FINANCIAL AFFAIRS The EU-MED trade of goods under the influence of the Barcelona Process Arno Bäcker.
The Political Economy of Structural Change and Progressive Income Distribution LAC-EU ECONOMIC FORUM 2013 Globalization, International Trade and the Welfare.
By Matthew Higgins and Jeffrey G. Williamson
1 THE FINANCIAL INDUSTRY AS A CATALYST FOR ECONOMIC GROWTH Louis Kasekende Chief Economist African Development Bank At the Nigeria International Conference.
The Euro-Med Agreements. Some lessons for Syria Jose-Maria Garcia-Alvarez-Coque, Professor of Economics, UPV, Valencia,
Trade effects of the Transatlantic Trade and Investment Partnership Elisa Borghi, Rodolfo Helg and Lucia Tajoli September 2014.
Education and international openness in Egypt Silvia Domeneghetti Supervisor: prof. R. Fiorentini.
EU Neighbourhood – Southern Mediterranean. The Euro-Mediterranean Conference of Ministers of Foreign Affairs, held in Barcelona on November 1995,
Copyright © 2009 Pearson Addison-Wesley. All rights reserved. Chapter 2 Comparative Economic Development.
1 Performance and Compensation – evidence of optimal contracting by Sun, Li and Liu Discussant: Oliver M. Rui The Chinese University of Hong Kong.
Presentation by Silke Lode and Juliane Menke We and the others – challenges of the European Neighbourhood Policy German-French-Polish Autumn Forum 25/9/2005.
Sustainability of economic growth and inequality in incomes distribution Assistant, PhD, BURZ R ă zvan-Dorin West University of Timisoara, Romania Lecturer,
Natural Resources and Economic Growth: The Role of Investment Thorvaldur Gylfason and Gylfi Zoega.
Bridging the ‘Digital Divide’: Information Technology & Growth in Small Developing States Robert Read & Didier Soopramanien.
Wiener Institut für Internationale Wirtschaftsvergleiche The Vienna Institute for International Economic Studies European industries and.
Performance of Intra-COMESA Trade Integration: A comparative Study with ASEAN’s Trade Integration Ebaidalla M. Ebaidalla and Abdelrahim. A. M. Yahia University.
International Forum on Remittances 2007 Washington D.C., October 2007 Euro-Mediterranean remittances: Partnerships and Investments Pedro J. F. de.
Economic diversification, development and globalization Natalya Volchkova November 20-21, 2008 New Delhi, India.
Jean-Raphael Chaponnière Marc Lautier Export catching-up in the Mediterranean Countries.
M. Velucchi, A. Viviani, A. Zeli New York University and European University of Rome Università di Firenze ISTAT Roma, November 21, 2011 DETERMINANTS OF.
Maria Hamdouchi & De’Ahna Johnson. As Middle Eastern and Northern African countries experienced the Arab Spring, how did the United States and its respective.
Trade, Markets and Economic Growth Harry Flam Institute for International Economic Studies, Stockholm University.
Spatial and non spatial approaches to agricultural convergence in Europe Luciano Gutierrez*, Maria Sassi** *University of Sassari **University of Pavia.
Contribution of Education and Training to Innovation and Growth
The use of GEM data for analyzing the relationship between entrepreneurship and economic growth Jolanda Hessels EIM and Erasmus School of Economics July.
Income Benchmark Applied Inclusive Growth Analytics Course June 29, 2009 Leonardo Garrido.
The changing geography of banking – Ancona, Sept. 23 rd 2006 Discussion of: “Cross border M&As in the financial sector: is banking different from insurance?”
ICDT’s Presentation By Mr.Abdel Aziz ALAMI Ankara - TURKEY, June 2009.
If institutions matter what is the economic benefit of Customs? by Dr Donald Feaver* & Dr Kenneth Wilson**, *Faculty of Law, Queensland University of Technology,
Loan Loss Provisioning and Economic Slowdowns: Too much, Too Late? By Luc Laeven and Giovanni Majnoni Finance Forum 2002 June 19-21, 2002.
1 The Impact of Low Income Home Owners on the Volatility of Housing Markets Peter Westerheide ZEW European Real Estate Society Conference 2009 Stockholm.
1 Towards a Theory of Optimal Financial Structure Justin Yifu Lin (World Bank) Xifang Sun (Seoul National University) Ye Jiang (Industrial and Commercial.
International Manufacturing Network Embeddedness and Innovative Performance Guannan Xu.
OPENNESS CAN BE GOOD FOR GROWTH The Role of Policy Complementarities Roberto Chang (Rutgers U.) Linda Kaltani (American U.) Norman Loayza (World Bank)
Firm Size, Finance and Growth Thorsten Beck Asli Demirguc-Kunt Luc Laeven Ross Levine.
Trade as a Key to Economic Growth and Development A Keynote Address MFT and UNDP Trade Forum, Pyongyang, DPR Korea, 4-5 May 2005 Peter Drysdale Australian.
EU-MED and the Investment Climate By Mustapha K. Nabli Chief Economist, Middle East and North Africa Region World Bank.
A quick Guide to Regional Policy Its origins and purpose.
Growth Diagnostics in Practice Applied Inclusive Growth Analytics Course June 29, 2009 Susanna Lundstrom, PRMED.
What explains Immigrant-Native gaps in European Labour Markets: The role of institutions Martin Guzi Martin Kahanec Lucia Mytná Kureková FIW-Workshop:
Free Trade.
Syria & Modern Banking in Light of Arab & International Practices Role of the Banking Sector in Developing Private Businesses Poul Gadegaard 2 nd - 3 rd.
Diery Seck & Amie Gaye, CREPOL 4 th July  1) Were there distinct impacts of the crisis on Arab Region and Sub-Saharan Africa (SSA)?  2) What are.
The wise use of dummies in gravity models: Export potentials in the Euromed region Juan M. Ruiz and Josep M. Vilarrubia Simposio de Análisis Económico.
Decentralisation From Subsidiarity to Success
with Gilberto Antonelli and Pinuccia Calia
The agricultural export-growth nexus in the EU-27 and the country risk
Luciano Gutierrez*, Maria Sassi**
Mediterranean Countries: industry, trade and development
1University of Pavia, Dipartimento di Ricerche Aziendali, Pavia, Italy
العمل، النمو والنوع الاجتماعي والحكم في الوطن العربي
Some unemployment patterns in the Mediterranean region
Mediterranean experiences
Wage Competitiveness in Levels ECB,
New East Asian Alliances
By Michael Mbate UN Economic Commission for Africa
LAUNCHING THE 2019 REGIONAL COMPETITIVENESS INDEX RCI 2019
Presentation transcript:

Trade similarity across the Mediterranean Basin Bridging the gap: the role of trade and FDI in the Mediterranean Naples, 9 June 2006 Luca De Benedictis and Lucia Tajoli Politecnico di MilanoUniversità di Macerata

Research questions General Issues economic integration Is economic integration affecting trade structures making countries more similar or more diversified in terms of production and trade patters? Which are the implications of a given specialization? trade structure Is the trade structure relevant? theory vs. empirics static vs. dynamic role of export composition Which is the role of export composition in determining income convergence within a group of countries (catching-up)? Luca De Benedictis: Trade and other openness indicators often positively criticisms on the robustness of the evidence associated to growth, but criticisms on the robustness of the evidence, on the indicators used, and on the lack of a clear underlying mechanism linking the two variables. Luca De Benedictis: Trade and other openness indicators often positively criticisms on the robustness of the evidence associated to growth, but criticisms on the robustness of the evidence, on the indicators used, and on the lack of a clear underlying mechanism linking the two variables.

Research questions Does it make a difference to change the export pattern? Does it matter to become more or less similar to a given country or group of countries? Does it matter in which way (in terms of forms of integration and in terms of sectoral composition) a country is open (and not only how much it is open)?

Relatively high GDP growth rates for the MED countries, but little or no catching-up in terms of GDP per capita Many political and institutional problems hampering growth and integration Difficulties in running acceptable growth regressions for these countries Relevance of these issues for the Mediterranean countries Are trade and export composition related to these problems ? Can an export-led growth model be achieved?

Aim of this work: -verify if export structures in the process of economic integration with the EU has become more similar to the EU export structure - verify if the change in the export structure is associated with other forms (non-traditional trade) of economic integration - verify if export structures capture characteristics of the development process Research questions

A group of countries with very strong ties with the EU Initial agreements very early, in the late 1978 EU is the main trade partner for the MED group, but not for all Barcellona Agreement as a compensation for the trade diversion? Growth of Med economic integration with the EU - and growth of their trade in general - somehow disappointing The EU - Med partnership

EU trade with the CEECs and with the MEDA group

Data and sources for this empirical analysis Countries: Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestinian territories, Syria, Tunisia, Turkey Benchmark: EU15 Trade data: exports toward the EU market in 97 sectors from Comext, Eurostat database Time period:

Three groups of countries in this sample: Mono-export (fuel) countries: Algeria and Syria Diversified but not changing Characteristics of the export composition of the MED Diversified and changing

Measuring export structure and similarity Export structure: the vector of shares of each sector on total exports, x 1j, ……x nj. Self-similarity: taking a base year, we observe how a country export structure changed in time. The change is measured by the variation of the correlation or distance indices. EU-Similarity: we compare a country’s export structure with the one of the EU, using different indices. We compare country’s export structure to the EU benchmark over time to observe whether differences narrow or widen.

Productivity Selection (Melitz, 2003) Knowledge spillovers (Keller, 2002) Factor composition (Slaughter, 1997; Ventura, 1997) => proxy used: high-tech intensityInvestments FDI Outward Processing Trade => proxy used: FDI + OPT Adaptation to international demand The Linder hypothesis (Linder, 1961; Markusen, 1986) => proxy used: growth in demandStability International risk sharing (Acemoglu and Zilibotti, 1997) Optimal currency area arguments => proxy used: efficiency of financial system and institutions Why similarity in trade structure should matter? Some possible channels:

Methodological pointsSimilarity => (1 – Distance) Distance: Bray-Curtis index similarity Measuring similarity in trade structures through a synthetic metric based on distance (De Benedictis-Tajoli, 2004) SELF-SIMILARITY EU-SIMILARITY Measuring similarity in trade structures both with respect to itself at the beginning of the period (SELF-SIMILARITY), and with respect to the EU15 (EU-SIMILARITY) countries Export sectoral shares sectors j = country k = benchmark x = sectoral export share i = sector Strong similarity  1 Weak similarity  0 Similarity in Trade Structures

Methodological points similarity Advantages of such a similarity index with respect to other alternatives: - no need of a normal distribution of observations, it is is appropriate in presence of skewed distributions (unlike correlation) - change of weight of sectors is taken into account (not based on pure ranking) =>it capture changes due to specific sectors - this particular index is immune from the double- zero paradox, it has the advantage of not increasing in the number of sectors considered, n; of being invariant to proportional sub-classifications of the n sectors considered; of considering both large and small differences

A comparison with another group: The EU- and SELF- similarity Plot for the CEECs

How can economic integration influence the observed changes? On the supply side: through FDI and other forms of delocalization of production, production sharing agreements between the EU and the MEDA can affect the share of exports in important sectors Previous result for the CEECs confirm the relevance of these effects: changes in the export structure of all CEECs is driven by changes in a few sectors highly involved in processing trade, and growth in EU demand also plays a role. But for the CEECs international fragmentation of production can foster both convergence and divergence of trade structures On the demand side: opening of the EU market can influence the export structure of the MEDA to accomodate the European demand Are these effects at work for the Mediterranean countries? Has integration gone far enough to produce them?

Exports toward the EU market: total and OPT trade Correlation for Tunisia: 0.95

Exports toward the EU market: total and OPT trade Correlation for Israel: 0.39

Exports toward the EU market: total and OPT trade Correlation for Turkey: 0.40

Export structure correlated to export volumes Changes in export composition correlated with increase in EU similarity Changes in export composition correlated with inward FDI Some regression results Changes in export composition correlated with OPT

Similarity in export composition and trade