The impact of de-globalization on China’s economic transformation: Evidence from manufacturing export

The economic transformation is an important policy practice of economic development in China. In the context of “deglobalization”, it is critically important to better understand the impacts of increasing trade costs on China’s economic transformation from the perspective of firms’ exports. In this study, we measure the trade costs of specific manufacturing sectors and provinces. We employ Heckman (1979) two-stage method and the data from China’s manufacturing firms to investigate the impacts of trade costs on heterogeneous firms’ exports. Based on these results, we further explore the impacts of trade costs on China’s economic transformation and discuss policy advisories. Our results indicate that the increase in trade costs have adverse impacts on China’s economic transformation. Specifically, increasing trade costs hinder firms’ export behaviors and export scales. However, these impacts are heterogeneous on different types of firms, which refers to the ownership reforms, manufacturing sector upgrades and coordinated regional development. In particular, increasing trade costs do not affect coordinated regional development in China, but they are not conducive to ownership reforms and manufacturing sector upgrades. Altogether, our findings provide the first evidence on the impacts of trade costs on China’s economic transformation from the perspective of firms’ exports, and also shed light on policy implications for promoting firms’ exports and economic transformation in the “deglobalization” period.     

The economic benefits of the EU Single Market in goods and services

This paper examines the macro-economic benefits of the Single Market in goods and services by simulating a counterfactual scenario in which tariffs and non-tariff barriers are reintroduced. In this counterfactual scenario, intra-EU trade flows are significantly reduced. Lower trade openness also means reduced market size and less competition. Using empirical evidence on the effect of the Single Market on firms’ mark-ups over marginal costs, we add these competition effects and arrive at a total estimate of around 9% higher GDP on average for the EU, but with a strong degree of heterogeneity across EU countries.     

FDI in China and global production networks: Assessing the role of and impact on big world players

How can countries successfully engage in global production networks? We provide a Computable General Equilibrium analysis of the impact of FDI on global production networks in Textiles, Chemicals, Electronics and Machinery, dividing the world economy in six regions (China, East Asia, Japan, EU28, the U.S. and the group of Emerging and Developing Economies). Interestingly for the policy maker, although the four sectors have contrasting production technologies, their Chinese exports and imports still follow a similar trend: East Asia and Japan are Chinese main intermediate suppliers while the US, Europe and the Emerging and Developing Economies play more the role of final markets. FDI inflows have benefitted China and we quantify by how much they have raised Chinese wages, GDP, national income and export competitiveness. By contrast, being an intermediate supplier or playing mostly the role of big final market in the network is not enough to succeed in your integration with China. The extent of the (positive or negative) effects is very much related to whether the structure of production (i.e., sectors’ weight in GDP) of the different economies is similar to (and therefore more easily crowded out by) Chinese booming sectors.     

The Political Consequences of Outsider Labour Market Status in the United States: A Micro‐level Study

This article contributes to recent research that seeks to understand the political consequences of ‘outsider’ labour market status. There is an emerging consensus that labour market outsiders have systematically different policy preferences and display systematically different political behaviour to securely employed ‘insiders’ in Europe. Yet the political consequences of outsider status in the USA are less clear. They may be expected to differ from those that have been documented in the European context, because: (1) the USA is characterized by low employment protection of insiders; and (2) there is evidence that Americans are more reluctant than Europeans to hold governments responsible for personal economic hardship. We therefore use the General Social Survey to examine how outsider labour market status is related to voting behaviour and to social policy preferences in the USA. We find that the concept of ‘labour market outsider’ – as conventionally operationalized – holds little explanatory power in the American context. Disaggregating the outsider category, our results suggest that the political consequences of outsider labour market status may be contingent on individual beliefs about government responsibility.     

Comparing the effectiveness of market-based and choice-based environmental policy

This paper examines the welfare effects of market-based (permits, taxes) and choice-based (voluntary emission certifications, eco-labels) environmental policy. My analysis shows that choice-based eco-labels can be a welfare-improving policy. However, these welfare gains occur through “green” consumer surplus as opposed to (social benefiting) emission reductions while emission taxes and permits increase welfare by causing “dirtier” or less efficient firms to leave the market. Although greater environmental conscientiousness makes eco-labeling an effective tool to improve overall welfare, eco-labels are not as effective at reducing environmental damage relative to traditional market-based emission taxes or permits. Using research on consumer preferences and previously implemented environmental policies, the effectiveness of traditional emission taxes and eco-labeling programs are estimated. The results suggest that consumers participation in the eco-labeled product market benefits producers, but overall, eco-labeling programs are an inefficient policy tool relative to traditional market-based emission taxes or permits.     

Reconsidering the common ratio effect: the roles of compound independence,reduction, and coalescing

Common ratio effects should be ruled out if subjects’ preferences satisfy compound independence, reduction of compound lotteries, and coalescing. In other words, at least one of these axioms should be violated in order to generate a common ratio effect. Relying on a simple experiment, we investigate which failure of these axioms is concomitant with the empirical observation of common ratio effects. We observe that compound independence and reduction of compound lotteries hold, whereas coalescing is systematically violated. This result provides support for theories which explain the common ratio effect by violations of coalescing (i.e., configural weight theory) instead of violations of compound independence (i.e., rank-dependent utility or cumulative prospect theory).     

Public support for the social rights and social obligations of the unemployed: Two sides of the same coin?

In light of the ever‐growing shift towards activation in European welfare states, the present article examines the relationship between citizens’ welfare generosity (i.e., support for social rights) and welfare conditionality (i.e., support for social obligations) with regard to the unemployed. Using data from the 2014 Belgian National Elections Study, we found that generosity and conditionality appear to be two sides of the same coin. The two factors are negatively correlated, and most of their respective attitudinal drivers are quite similar in strength, yet opposite in direction. In addition to self‐interest and conventionally recognised ideational beliefs, such as egalitarianism and individualism, beliefs about welfare deservingness – an explanatory factor that has remained understudied in the field – are particularly influential in shaping people’s welfare preferences. A stronger emphasis on criteria of deservingness such as control, attitude and reciprocity considerably lowers support for social rights and strengthens support for social duties.     

Indecisiveness aversion and preference for commitment

We present an axiomatic model of preferences over menus that is motivated by three assumptions. First, the decision maker is uncertain ex ante (i.e., at the time of choosing a menu) about her ex post (i.e., at the time of choosing an option within her chosen menu) preferences over options, and she anticipates that this subjective uncertainty will not resolve before the ex post stage. Second, she is averse to ex post indecisiveness (i.e., to having to choose between options that she cannot rank with certainty). Third, when evaluating a menu she discards options that are dominated (i.e., inferior to another option whatever her ex post preferences may be) and restricts attention to the undominated ones. Under these assumptions, the decision maker has a preference for commitment in the sense of preferring menus with fewer undominated alternatives. We derive a representation in which the decision maker’s uncertainty about her ex post preferences is captured by means of a subjective state space, which in turn determines which options are undominated in a given menu, and in which the decision maker fears, whenever indecisive, to choose an option that will turn out to be the worst (undominated) one according to the realization of her ex post preferences.     

The impact of financial sanctions: The case of Iran

This study provides a detailed analysis of the impact of financial sanctions on publicly traded companies. We consider the effect of imposing and lifting sanctions on the target country’s traded equities and examine the differences in the reaction of politically connected firms and those without such connections. The paper focuses on Iran due to (1) its sizable financial markets, (2) imposition of sanctions of varying severity and duration on private and state-owned companies, (3) the significant presence of politically connected firms in the stock market, and (4) the unique event of the 2015 nuclear deal, resulting in fairly rapid lifting of a sizable portion of imposed sanctions. We find that sanctions affect politically connected firms more than ordinary firms, have lasting negative effects on profitability ratios, and that politically connected firms stock prices bounce back more slowly after removal of sanctions. Firms targeted by financial sanctions decrease their leverage and increase their cash holding to manage their perceived increase in risk profile.     

Firm internationalization and performance: Evidence for designing policies

The debate on the relationship between internationalization and performance is still open and is a hot topic for policymakers, but they ignore the impacts for most of the firms supported. The paper is based on a large database of seven years that considers quantitative-qualitative and control variables. To reduce industry and country heterogeneity we focused on the Italian automotive supply chain. We tested 5 modes of internationalization on firms’ profitability so to support the design of policies. Our results are partially in contrast with literature; therefore we identify specific environments where policies, namely for exporting, could be more effective.     

Bringing firms on board. Inclusiveness of the dual apprenticeship systems in Germany,Switzerland and Denmark

In dual vocational education and training (VET) systems, the state and employers collaborate in order to meet a country’s needs in terms of education for youth and professional skills for the labour market. These systems are considered as effective tools to lower youth unemployment. However, since firms in dual VET systems select the apprentices, not every candidate gets access to in‐firm training. Consequently, governments develop measures that try to make their dual VET systems more inclusive. We present a categorisation of the different measures used to enhance inclusiveness in three dual collective skill formation countries (Switzerland, Germany and Denmark). We show that inclusiveness measures exist in each of the three countries but are limited in the extent to which firms are expected to play an active role in them. We conclude that the types of measures adopted are related to political economy traditions and the country’s level of macro‐corporatism.     

From “what works” to “making it work”: A practice perspective on evidence-based standardization in frontline service organizations

Evidence-based standards are becoming increasingly influential in frontline services connected to labor market inclusion of vulnerable citizens. To increase our understanding of standardization in such public service delivery, this study draws on interviews and ethnographic fieldwork from two frontline offices in the Norwegian Labour and Welfare Administration (2017–2018) that use the evidence-based Individual Placement and Support (IPS) standard. Adopting a theoretical perspective of organizational practices, the study highlights two distinct approaches to practicing IPS in the frontline organizations: as a “practice shift” in one organization (i.e., creating and legitimizing radically new service practices involving closer collaboration with employers) and as a “practice revival” in the other (i.e., reinstating more traditional service practices involving a holistic client orientation). Each approach relates to a specific constellation of recruitment practices, dynamics between frontline supervisors and staff, and team integration. The study contributes to the literature in two ways. First, it shows the underlying flexibility embedded in standardization and how standards may be implemented and adapted in ways that may either promote more radical change or revive traditional practices. Second, it nuances positions in the literature on the impact of standards on professional service work. On this basis, the study suggests broadening the attention in research on evidence-based standards in public service delivery from discussions of “what works” to understanding the broader organizational dynamics involved in “making it work.”     

Environmental Policy Attitudes: Issues,Geographical Scale,and Political Trust*

Objectives. This article examines environmental policy attitudes, focusing on the differences in preferences across issue type (i.e., pollution, resource preservation) and geographical scale (i.e., local, national, global). In addition, we study whether an individual's trust in government influences environmental policy attitudes. Methods. Analyzing data from the 2007 Cooperative Congressional Election Study, we estimate a series of OLS regression models to examine the public's environmental policy attitudes. Results. We find stronger public support for government action to address pollution issues than resources issues, and stronger support for local and national pollution abatement than dealing with global problems. We also find that Republicans and ideological conservatives are less likely to support further government effort to address the environment, and that more trusting individuals are more favorable to government action to address pollution and global issues. Conclusion. Environmental policy attitudes vary by the nature of the issue; however, political ideology and partisan affiliation are consistent predictors of preferences across issues, even when controlling for an individual's level of trust in government.     

Are EU standards detrimental to Africa’s exports?

The high costs of complying with standards adversely affect export competitiveness. Existing evidence suggests that the harmonisation of standards to international benchmarks reduces compliance costs and is less trade-inhibiting, or may even be trade-promoting. This paper thus investigates how the regulatory margin in food standards affects Africa’s fish exports to the EU. We measure the regulatory margin in standards by comparing EU standards to the international scientifically-formulated benchmarks. Our results indicate that, relative to the international standards, EU fish standards are indeed non-inhibiting. Thus, the high number of fish exports from Africa rejected by the EU due to non-compliance with EU standards does not really suggest that the measures are overly restrictive but rather is an indication of the poor quality of Africa’s fish exports. This finding suggests a need for upgrades to Africa’s fish export quality, especially the fish supply chain infrastructure, through continuous improvements in fish export logistics facilitation and export promotion measures.     

Towards a more integrated, symmetric and viable EMU

The capacity of the EMU system to successfully tackle an economic crisis has been questioned during the recent financial and economic turmoil. The basic economic structure and competitiveness in the eurozone has developed in an undesirable direction. The number of member countries of the EMU, as well as the basic construction of the EMU system, must again be the focus of the discussion. After a study of the current accounts of 12 EMU countries follows a discussion in terms of the Barro–Gordon model about the costs of the EMU, i.e., to bring together the preferences of the political authorities in different EMU countries and the optimal combination of inflation and employment in the eurozone to determine the sought equilibrium of the model. If economic structural differences are increasing, they must be compensated by increased integration. It is feasible, but only for the economically viable EMU countries.     

Trade policy in Palestine: A reassessment

The paper develops a CGE macro-model for Palestine, departing in three fundamental ways from the set-up applied in earlier studies. The present framework: (i) reformulates the modelling of fiscal policy in light of context-specific elements, including the absence of a government bond market and the incomplete transfer of revenues collected by Israel for the PNA; (ii) endogenizes private capital flows; (iii) postulates a demand-driven causality structure. Various policy scenarios are then assessed, with one crucial novelty: the overall effect of further trade liberalization turns out to be slightly contractionary, due to its fiscal implications.     

Cross-Atlantic implications of the new US policy mix

This paper will assess implications of shifting policy mix in the US for global imbalances and adjustment, with a focus on the euro area, using the European Commission’s QUEST model. Following early market euphoria after the elections on the account of expected “decisive” pro-market policies, uncertainty regarding the composition and timing of the new administration's economic policies has been the norm. Early proposals included a substantial fiscal stimulus which, combined with a tightening monetary stance, was expected to drive up long-run interest rates and the dollar, leading to widening global imbalances and potential instability. Today the expansionary impact of the fiscal plans is the subject of a heated debate while monetary policy continues to tighten steadily and risks related to a protectionist trade agenda remain pronounced. Contrary to initial expectations, real interest rates and the dollar have weakened, while global imbalances persist. Addressing policy and structural needs in the US – and abroad – is a necessary condition to rein in global imbalances. In this context, this paper will discuss the role of the G20/G7 to promote a coordinated policy approach and in particular to what extent the G20/G7 can deal with the transition from crisis management to the balancing of heterogeneous preferences among the policy makers to promote global growth and stability.     

Socioeconomic status and the dynamics of preferences for income inequality in the United States, 1978–2016

Although considerable evidence indicates that public preferences for income inequality and redistribution vary across socioeconomic groups (i.e., occupation and income), much less is known about the temporal dynamics of these preferences. The purpose of this study is (a) to examine whether the attitudinal distance between managerial/professional workers and unskilled manual workers has changed (converged or diverged) over time and to (b) explore the reasons for and implications of the dynamics of preferences in the past several decades. Using data from the General Social Survey 1978–2016 (23 time‐points; N = 27,211), this study finds that the influence of occupational class has lost some of its significance in shaping public preferences for income inequality and that the declining effect of occupation can be explained in part by the attitudinal convergence between better‐ and less‐educated citizens. Findings suggest that proequality coalitions across educational boundaries play a remedial role in bridging the occupational divide over government redistribution in the United States.     

政府补助与民营企业研发投入

在关于政府研发补助政策对企业研发投入影响效应的争论背景下,本文通过分析第9次全国民营企业抽样调查数据,发现政府研发补助政策对中国民营企业研发投入具有激励效应,但这一效应受到企业决策者、企业资源禀赋结构以及企业环境等企业系统相关属性的影响。本文认为,为了进一步推动企业创新研发活动,政府需要继续改善市场环境,并在补助政策上向那些在企业决策和资源禀赋结构上更趋向于自主研发创新的民营中小企业倾斜。     

The Impact of Health-Related Emotions on Belief Formation and Behavior

We present a theoretical model of health beliefs and behaviors that explicitly takes into account the emotional impact of possible bad news (i.e., illness), ex-ante in the form of anxiety and ex-post in the form of disappointment. Our model makes it possible to explain (simultaneously) a number of anomalies such as ’low’ testing rates, heterogeneous perceptions of risk levels, underestimation of health risk, ostriches and hypochondriacs, over-use and under-use of health services, patient preference for information when relatively certain of not being ill, yet avoiding information when relatively certain of being ill, etc. Our model matches observed patterns both in health beliefs and health behaviors and irrational health beliefs and behaviors can be characterized as the optimal response under a given structure of emotions and preferences.