Rebecca Freeman and Andreas Glossner won one of SAIS Bologna's top academic awards at last month's end-of-the-year ceremony for a paper they wrote on international economics. Below they tell us how they got their idea for the paper and what they examined. Generally we like to print links to papers like Rebecca's and Andreas's that win a C. Grove Haines award, but they expect to publish it this summer -- and so we'll have to wait before we can read the full work. Here's an aperitivo.
Q: How did you get the idea for the paper?
A: The idea came about in the context of our course on Empirical Methods and International Trade. We recognized that non-tariff and behind-the-border barriers prevent both industrialized and developing countries from realizing potential benefits of trade. This negatively impacts conceivable efficiency gains, productivity improvements and subsequent growth possibilities that derive from increased exports and imports. There is a role for trade facilitation in easing trade costs by improving efficiency throughout the international trade chain.
Q: What was the main point?
A: Given our awareness of the role for trade facilitation, we aimed to quantify the impact of trade facilitation on gross trade flows and exports of value-added. Trade in value-added is increasingly important in the context of globalization as many countries are involved in fragmented production chains.
Q: What was the hardest part of your work on the paper?
A: The most challenging part of the work was constructing a database comprising indicators on trade facilitation. The data came from diverse sources and as such we coded and standardized variables to be able to use them consistently in our analysis.
Q: What tips would you give to incoming students as they prepare to write papers here?
A: We would suggest being creative and pursuing topics you are passionate about. This will make the work much more rewarding!
Abstract
This paper employs a gravity-model approach to investigate the links between trade facilitation and exports of value-added. For the first time, to our knowledge, we draw upon the newly released OECD-WTO Trade in Value-Added (TiVA) Database to add to the existing literature on trade facilitation and gross trade flows. First, we demonstrate that standard trade facilitation indicators are significant not only for gross trade but for value-added trade flows as well. Second, notwithstanding possible endogeneity bias, it is shown that regional trade agreements strongly impact both gross and value-added trade. Lastly, we find that trade flows depend positively on the extent to which importing and exporting countries’ companies are present in value-chains.
Q: How did you get the idea for the paper?
A: The idea came about in the context of our course on Empirical Methods and International Trade. We recognized that non-tariff and behind-the-border barriers prevent both industrialized and developing countries from realizing potential benefits of trade. This negatively impacts conceivable efficiency gains, productivity improvements and subsequent growth possibilities that derive from increased exports and imports. There is a role for trade facilitation in easing trade costs by improving efficiency throughout the international trade chain.
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| Andreas and Rebecca after winning their award |
A: Given our awareness of the role for trade facilitation, we aimed to quantify the impact of trade facilitation on gross trade flows and exports of value-added. Trade in value-added is increasingly important in the context of globalization as many countries are involved in fragmented production chains.
Q: What was the hardest part of your work on the paper?
A: The most challenging part of the work was constructing a database comprising indicators on trade facilitation. The data came from diverse sources and as such we coded and standardized variables to be able to use them consistently in our analysis.
Q: What tips would you give to incoming students as they prepare to write papers here?
A: We would suggest being creative and pursuing topics you are passionate about. This will make the work much more rewarding!
Abstract
This paper employs a gravity-model approach to investigate the links between trade facilitation and exports of value-added. For the first time, to our knowledge, we draw upon the newly released OECD-WTO Trade in Value-Added (TiVA) Database to add to the existing literature on trade facilitation and gross trade flows. First, we demonstrate that standard trade facilitation indicators are significant not only for gross trade but for value-added trade flows as well. Second, notwithstanding possible endogeneity bias, it is shown that regional trade agreements strongly impact both gross and value-added trade. Lastly, we find that trade flows depend positively on the extent to which importing and exporting countries’ companies are present in value-chains.
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