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Begin New Search Topic International Trade and Finance Political Geography Europe Content Type Working Paper

41. Testing the Smile Curve: Functional Specialisation in GVCs and Value Creation

Author:
Roman Stöllinger
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
According to the ‘smile curve hypothesis’ the potential for generating value added varies significantly across the various functions along a firm’s value chain. It suggests in particular that the production stage is the least promising value chain function in the entire manufacturing process. This logic implies that countries specialising as ‘factory economies’ are likely to generate comparatively little value added. To shed light on the relationship between functional specialisation along the value chain and value creation, this paper develops measures for functional specialisation derived from project-level data on greenfield FDI for a global sample of countries. These measures keep the industry and the functional dimension of specialisation strictly apart. They are used to test econometrically the negative relationship between value added creation and functional specialisation in production as predicted by the smile curve hypothesis.
Topic:
International Trade and Finance, European Union, Economy, NAFTA, Manufacturing, and Global Value Chains
Political Geography:
Europe and East Asia

42. Europe and Iran: The Economic and Commercial Dimensions of a Strained Relationship

Author:
Cornelius Adebahr
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Europe and Iran had begun to invest in a closer commercial relationship just when the United States withdrew from the nuclear deal in May 2018. Since then, Washington has re-imposed its stringent economic sanctions, targeting Iran’s oil exports as a major source of government revenue but also banning financial transactions with the country. This poses an enormous challenge for the EU, which had intended to use the 2015 agreement as a stepping stone to promote regional cooperation and, ultimately, a more comprehensive relationship with Iran. Paper produced in the framework of the IAI-FEPS project entitled “Europe and Iran in a fast-changing Middle East: Confidence-building measures, security dialogue and regional cooperation”, December 2018.
Topic:
Foreign Policy, International Trade and Finance, Bilateral Relations, Sanctions, and Transatlantic Relations
Political Geography:
Europe, Iran, Middle East, North America, United States of America, and European Union

43. Soft vs Hard Governance for Labour and Environmental Commitments in Trade Agreements: Comparing the US and EU Approaches

Author:
Vandana Gyanchandani
Publication Date:
08-2018
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Three methodologies are used to enforce labour and environmental commitments in the US and EU trade agreements: cooperative, sanctions and composite. In-depth analysis of the scope of commitments, level of protection, institutional framework as well as types of informal and formal dispute processes elucidates the pros and cons of such methodologies. Sanctions approach weakens cooperation by misjudging the complexity of domestic policy adjustments through transnational governance. Cooperative mechanism within the NAAEC's composite design emerges as the best approach: Submission on Enforcement Matters (SEM). As it provides for an independent secretariat supported by civil society group and factual records as a sunshine remedy to review citizen submissions. However, the process is constrained by political clout, lack of managerial capacity and legal dilemmas around informal lawmaking (IN-LAW) procedures.
Topic:
Economics, Environment, International Cooperation, International Trade and Finance, Labor Issues, Sustainable Development Goals, and Global Political Economy
Political Geography:
United States, Europe, Global Focus, and European Union

44. The Sino-Russian and US-Russian relationships: Current developments and future trends

Author:
Marcin Kaczmarski, Mark Katz, and Teija Tiilikainen
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs
Abstract:
The great-power system has been in constant change since the end of the Cold War. The US became the hegemonic power, and under its shelter, the European Union was able to transform into a European-wide political body. Soon, a group of leading regional powers started to question the universalist aspirations of the Western-led international order. Two members of this club in particular were not satisfied with the role of a regional hegemon and had more global ambitions. China has already become the largest trading nation globally, and Chinese foreign policy has assumed an assertive tone. China has both the potential to challenge US hegemony, as well as the political will to use it. Russia’s project to achieve a global great-power status, on the other hand, is inspired by its historical identity and its alleged humiliation by the West after the collapse of the Soviet Union. Russia longs for recognition of its great-power status in particular from the US. This report focuses on relations between China and Russia on the one hand and the US and Russia on the other. It analyses the current developments and future trends in these relationships, as well as their implications for the EU.
Topic:
Foreign Policy, International Cooperation, International Trade and Finance, and Hegemony
Political Geography:
Russia, United States, China, Europe, Asia, and North America

45. The EU and China: Modest Signs of Convergence?

Author:
Gustaaf Geeraets
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
Against a background in which the United States is increasingly drawing into question its commitments to free trade and the global commons, the challenge for the EU and China is to deal with a global governance system that is evolving from a multilateral system centred around the US into a more diffuse system resting on the three strong trading poles: China, the EU and the US.
Topic:
International Trade and Finance, Governance, European Union, and Multilateralism
Political Geography:
United States, China, Europe, Asia, and North America

46. Institutional investors and home bias in Europe’s Capital Markets Union

Author:
Zsolt Darvas and Dirk Schoenmaker
Publication Date:
03-2017
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Integrated capital markets facilitate risk sharing across countries. Lower home bias in financial investments is an indicator of risk sharing. We highlight that existing indicators of equity home bias in the literature suffer from incomplete coverage because they consider only listed equities. We also consider unlisted equites and show that equity home bias is much higher than previous studies perceived. We also analyse home bias in debt securities holdings, and euro-area bias. We conclude that European Union membership may foster financial integration and reduce information barriers, which sometimes limit cross-country diversification. We calculate home bias indicators for the aggregate of the euro area as if the euro area was a single country and report remarkable similarity between the euro area and the United States in terms of equity home bias, while there is a higher level of debt home bias in the United States than in the euro area as a whole. We develop a new pension fund foreign investment restrictions index to control for the impact of prudential regulations on the ability of institutional investors to diversify geographically across borders. Our panel regression estimates for 25 advanced and emerging countries in 2001-14 provide strong support for the hypothesis that the larger the assets managed by institutional investors (defined as pension funds, insurance companies and investment funds), the smaller the home bias and thereby the greater the scope for risk sharing.
Topic:
International Political Economy, International Trade and Finance, Economic structure, and Europe Union
Political Geography:
Europe

47. Fundamental uncertainty and unconventional monetary policy: an info-gap approach

Author:
Yakov Ben-Haim, Maria Demertzis, and Jan Willem Van Den End
Publication Date:
02-2017
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
This paper applies the info-gap approach to the unconventional monetary policy of the Eurosystem and so takes into account the fundamental uncertainty on inflation shocks and the transmission mechanism. The outcomes show that a more demanding monetary strategy, in terms of lower tolerance for output and inflation gaps, entails less robustness against uncertainty, particularly if financial variables are taken into account. Augmenting the Taylor rule with a financial variable leads to a smaller loss of robustness than taking into account the effect of financial imbalances on the economy. However, in some situations, the augmented model is more robust than the baseline model. A conclusion from our framework is that including financial imbalances in the monetary policy objective does not necessarily increase policy robustness, and may even decrease it
Topic:
Economics, International Political Economy, and International Trade and Finance
Political Geography:
Europe

48. Belarus-West Relations: The New Normal

Author:
Dzianis Melyantsou
Publication Date:
03-2017
Content Type:
Working Paper
Institution:
Center for Transatlantic Relations
Abstract:
This paper is part of CTR's Working Paper Series: "Eastern Voices: Europe's East Faces an Unsettled West." The new geopolitical environment formed after the annexation of Crimea and the war in the Donbas, together with emerging threats and challenges, are pressing both Belarus and the West to revise their policies in the region as well as their relations with each other. In this new context, Belarus is seeking a more balanced foreign policy and, at least towards the Ukrainian crisis, a more neutral stance.
Topic:
International Relations, Diplomacy, International Trade and Finance, War, Territorial Disputes, Foreign Aid, Sanctions, and Geopolitics
Political Geography:
Russia, Europe, Ukraine, Belarus, Crimea, United States of America, and European Union

49. What Ukraine Should Demand of Itself and from the West

Author:
Natalie A. Jaresko
Publication Date:
03-2017
Content Type:
Working Paper
Institution:
Center for Transatlantic Relations
Abstract:
This paper is part of CTR's Working Paper Series: "Eastern Voices: Europe's East Faces an Unsettled West." Once again, the world is grappling with historic challenges, as it did when the Soviet Union fell in 1991, and once more, Ukraine is at the forefront of these challenges. The Kremlin’s attempts to destroy Ukraine’s European aspirations is simply one of Russia's many challenges to the post-World War II international liberal order. The actions of the Kremlin -- be they in Ukraine, Georgia, Moldova, and Syria; in the U.S. electoral process; or in the funding of far-right and far-left political parties throughout Europe -- have but one purpose: to destroy the transatlantic partnership and the principles of the post-World War II order and peace. Ukraine is simply one of the battlegrounds, but it is a key because it is in Europe. Unity of the transatlantic partnership and of the democratic nations is critical. Unity of support for the Ukrainian transition process is a serious part of this battle, because Ukraine’s successful democratic, rule-of-law based transformation is key to ensuring a Europe whole, free and at peace.
Topic:
International Trade and Finance, Territorial Disputes, Economy, and Protests
Political Geography:
Russia, Europe, Ukraine, and Crimea

50. The Future Development of EU Exports in a Global Context

Author:
Robert Stehrer, Roman Stöllinger, and Sandra Leitner
Publication Date:
11-2017
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
Global trade patterns are changing rapidly. Emerging economies are increasing their share of exports overall and intensifying competition in nearly all sectors. Using a gravity-based approach, this report examines the future profile of European Union (EU) world market shares at the aggregate and sectoral level. It further points towards the changing patterns of trade within the EU. Based on the results, some conclusions on EU industrial policy are drawn.
Topic:
Industrial Policy, International Trade and Finance, Global Markets, Economic Growth, and Trade
Political Geography:
Europe, Global Focus, and European Union

51. CETA Without Blinders: How Cutting ‘Trade Costs and More’ Will Cause Unemployment, Inequality and Welfare Losses

Author:
Pierre Kohler and Servaas Storm
Publication Date:
10-2016
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
Proponents of the Comprehensive Economic and Trade Agreement (CETA) emphasize its prospective economic benefits, with economic growth increasing due to rising trade volumes and investment. Widely cited official projections suggest modest GDP gains after about a decade, varying from between 0.003% to 0.08% in the European Union and between 0.03% to 0.76% in Canada. However, all these quantitative projections stem from the same trade model, which assumes full employment and neutral (if not constant) income distribution in all countries, excluding from the outset any of the major risks of deeper liberalization. This lack of intellectual diversity and of realism shrouding the debate around CETA’s alleged economic benefits calls for an alternative assessment grounded in more realistic modeling premises. In this paper, we provide alternative projections of CETA’s economic effects using the United Nations Global Policy Model (GPM). Allowing for changes in employment and income distribution, we obtain very different results. In contrast to positive outcomes projected with full-employment models, we find CETA will lead to intra-EU trade diversion. More importantly, in the current context of tepid economic growth, competitive pressures induced by CETA will cause unemployment, inequality and welfare losses. At a minimum, this shows that official studies do not offer a solid basis for an informed decision on CETA.
Topic:
International Trade and Finance, European Union, GDP, and Diversity
Political Geography:
Europe

52. Financing SMEs in Europe: Stylised Facts, Policies, Challenges

Author:
Daniele Ciani, Paolo Finaldi Russo, and Valerio Vacca
Publication Date:
12-2015
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
This paper describes the main features of European SMEs’ financial behaviour and the policies recently put in place to support their funding. European SMEs are structurally more leveraged and charged with higher interest rates than large firms. Moreover, the crisis has deeply affected their fund-raising capacity, as banks reduced credit supply while non-bank funding was unavailable to most SMEs. Against this background, EU has focussed its policies on long-term investment and on a more favourable environment for SMEs financing, including through the launch of the Capital Markets Union. At the national level, most governments have provided guarantees and enhanced the role of national development banks. Nevertheless, key issues are still outstanding, such as the funding of innovative firms and the improvement of transparency and of the legal and regulatory frameworks.
Topic:
Economics, International Trade and Finance, Markets, and European Union
Political Geography:
Europe
Publication Identifier:
978-88-98650-71-2
Publication Identifier Type:
ISBN

53. Is Europe to Benefit from China's Belt and Road Initiative?

Author:
Nicola Casarini
Publication Date:
10-2015
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
With the One Belt One Road (OBOR), arguably Beijing’s major diplomatic outreach in decades, a process towards greater Sino-European connectivity has been put in place. The implementation of the OBOR in Europe has focused so far on financing infrastructure projects, in particular railways in Southeast Europe and ports in the Mediterranean Sea. This has been complemented by growing monetary linkages between the People’s Bank of China and European central banks through the establishment of currency swap agreements and yuan bank clearing – so-called “offshore renminbi hubs” – with the aim of lowering transaction costs of Chinese investment and bolstering the use of the Chinese currency. While there are undoubtedly great economic opportunities, China’s OBOR initiative also presents the EU with a major political challenge. There is the risk, in fact, that a scramble for Chinese money could further divide EU member states and make it difficult for Brussels to fashion a common position vis-à-vis Beijing. Furthermore, China’s economic penetration into Europe may lead – if not properly managed – to a populist backlash as well as a strain in relations with Washington. All these elements should be taken into consideration by EU policymakers, as China’s OBOR makes inroads into the Old Continent.
Topic:
Development, International Trade and Finance, Bilateral Relations, and Infrastructure
Political Geography:
China and Europe
Publication Identifier:
978-88-98650-64-4
Publication Identifier Type:
ISBN

54. China's New Silk Road Initiative

Author:
Zhao Minghao
Publication Date:
10-2015
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
The European Council has mandated the High Representative of the Union for Foreign Affairs and Security Policy, Federica Mogherini, to draft a Global Strategy by June 2016. Given Europe’s status as a global power, such a strategy must respond to Europe’s own challenges as well as to the new grand strategies of other major players in world politics, like China. To better understand the central tenets of the Chinese leadership’s strategic thinking, two keywords are most important – the “Four Comprehensives” and the “One Belt and One Road” (OBOR). As an initiative mainly focusing on promoting Eurasian integration and reshaping Chinese geo-economic advantages, the OBOR is highly consequential to China’s interactions with Europe and the rest of the world at large in the decades to come. How to take advantage of the OBOR, create new EU-China synergies, and tackle relevant challenges are questions the EU leaders should be attentive to.
Topic:
Economics, International Cooperation, International Trade and Finance, Markets, and Bilateral Relations
Political Geography:
Europe and Asia
Publication Identifier:
978-88-98650-61-3
Publication Identifier Type:
ISBN

55. Estimating Illicit Flows of Capital via Trade Mispricing: A Forensic Analysis of Data on Switzerland

Author:
Alex Cobham, Petr Janský, and Alex Prats
Publication Date:
01-2014
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper assesses the role of Switzerland as the leading hub for global commodities trading, in terms of the patterns of prices received by original exporting countries and subsequently by Switzerland and other jurisdictions. We find support for the hypotheses that (i) the average prices for commodity exports from developing countries to Switzerland are lower than those to other jurisdictions; and that (ii) Switzerland declares higher (re-)export prices for those commodities than do other jurisdictions. This pattern implies a potential capital loss for commodity exporting developing countries and we provide a range of estimates of that loss - each of which suggests the scale is substantial (the most conservative is around $8 billion a year) and that the issue merits greater research and policy attention. An important first step would be a Swiss commitment to meet international norms of trade transparency.
Topic:
Economics, Industrial Policy, International Trade and Finance, Markets, and Developing World
Political Geography:
Europe and Switzerland

56. Reforming Finance: Macro and Micro Perspectives

Author:
Pierre Siklos
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Reforms of the financial system in the wake of the global financial crisis are incomplete. Beyond reforms, good judgment is essential in a crisis. Short-termism in finance cannot be completely controlled by regulation and supervision. Financial crises are inevitable but need not be as virulent at the global financial crisis. Central banks will have to rethink their policies and how they interact with other agencies partially responsible for maintaining financial system stability.
Topic:
Economics, Globalization, International Trade and Finance, Financial Crisis, Governance, and Reform
Political Geography:
Europe

57. Time to Reset the European Neighborhood Policy

Author:
Stefan Lehne
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Through its European Neighborhood Policy (ENP), the European Union (EU) aims to support the structural transformation of its Eastern and Southern neighbors, promoting democracy, the rule of law, and successful market economies. Ten years after the ENP's launch, it is clear that the policy is not working. Adjusting the ENP to the changing reality on the ground, sharpening its tools, and rebuilding its credibility should be a top priority for the EU's foreign policy leadership.
Topic:
Foreign Policy, Democratization, Economics, International Trade and Finance, and Markets
Political Geography:
Europe

58. Supporting The Internet as a Platform for International Trade

Author:
Joshua Meltzer
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
This paper is about the potential of the Internet as a platform for international trade. A traditional understanding of the impact of the Internet on commerce is derived from the dot.com experience of the 1990s, where Internet companies such as Pets.com and Amazon sold goods online. Since then, the impact of the Internet on commerce has grown and changed. Certainly, the ability to sell goods online remains important. However, the key development is that the Internet is no longer only a digital storefront. Instead, the Internet as described in this working paper is a platform for businesses to sell to customers domestically and overseas, and is a business input that increases productivity and the ability of businesses to compete. Understanding the Internet as a platform for trade highlights its broad economic potential. It emphasizes how the commercial opportunities are no longer limited to Internet companies, but are now available for businesses in all sectors of the economy, from manufacturing to services. Moreover, the global nature of the Internet means that these opportunities are no longer limited to domestic markets, but are embraced wherever Internet access is available.
Topic:
Economics, International Trade and Finance, Markets, Science and Technology, and Communications
Political Geography:
Africa, United States, and Europe

59. Turkey's Energy Strategy and its Role in the EU's Southern Gas Corridor

Author:
Erkan Erdogdu
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
The Southern Gas Corridor (SGC) is a European Commission initiative aimed at facilitating the diversification of the routes and sources of gas imported into Europe. This paper is devoted to the analysis of Turkey's role in this initiative. Following a summary of the current economic and energy situation in Turkey, the paper presents recent developments in the SGC and an analysis of Turkey's role in the EU's SGC vision. It concludes that although the newly-built infrastructure within the SGC framework will probably serve Azerbaijani and Turkish interests first in their future relations with the EU, rather than the other way round, as had been initially hoped by the EU, it still addresses the EU's basic strategic interests, namely, the diversification of gas supply routes and suppliers.
Topic:
Economics, International Trade and Finance, and Natural Resources
Political Geography:
Russia, United Kingdom, Europe, Turkey, Asia, and Netherlands

60. Framing Banking Union in the Euro Area: Some empirical evidence

Author:
Diego Valiante
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Evidence shows that financial integration in the euro area is retrenching at a quicker pace than outside the union. Home bias persists: Governments compete on funding costs by supporting 'their' banks with massive state aids, which distorts the playing field and feeds the risk-aversion loop. This situation intensifies friction in credit markets, thus hampering the transmission of monetary policies and, potentially, economic growth. This paper discusses the theoretical foundations of a banking union in a common currency area and the legal and economic aspects of EU responses. As a result, two remedies are proposed to deal with moral hazard in a common currency area: a common (unlimited) financial backstop to a privately funded recapitalisation/resolution fund and a blanket prohibition on state aids.
Topic:
Economics, International Trade and Finance, and Monetary Policy
Political Geography:
Europe