In light of concerns over the environmental impact of Special Economic Zones located in developing countries, where environmental regulation is weak, we analyse the electricity intensity of firms in SEZs. We use firm level data from Africa and Asia, and we find that SEZ firms have higher electricity intensity as opposed to non-SEZ firms. If they also face higher fiscal, financial or environmental regulations, the electricity intensity of firms in SEZs increases by a greater rate as opposed to non-SEZ firms. As such, establishing SEZs may have significant environmental implications JEL classification: F14; J16.
Using firm level data from Africa and Asia, we estimate the impact of being in a special economic zone (SEZ) on a firm's probability of exporting, export intensity, and value of exports. At the extensive margin, we find that SEZ firms in open economies are 25% more likely to export than their non-SEZ counterparts, with a large negative effect in closed economies. At the intensive margin, we find that SEZs increase the value of exports, but only in countries with barriers to imports where the estimate increase is 3.6%. Thus, the estimated effect of introducing an SEZ can be meaningful, but is heavily contingent on the local economic environment.
A large body of evidence highlights the economic benefits of exporting, both at the country level and for an individual firm. 1 As is well established, although exporting firms have higher profits, greater productivity and pay higher wages, only a minority of firms export due to the costs of exporting. The typical costs considered are economic (e.g. transport costs), policy-generated (e.g. tariffs or nontariff barriers) or informational (e.g. finding a trading partner). In particular, the ITC (2015b) suggests that women may be particularly impacted by these costs since they may find it especially difficult to access trade credit or link into information networks. 2 This is on top of a number of barriers which may inhibit productivity and growth-and therefore exporting-by female-led firms. 3 1 For example, Frenkel and Romer (1999) is a classic example of work linking trade to country-level growth, with Singh (2010) providing a recent survey of the literature. Melitz and Redding (2014), meanwhile, provide a recent survey of the firm-level results which emerged following the contribution of Melitz (2003).2 As demonstrated Berman and Héricourt (2010), access to financial markets is a crucial factor for the export decision. Porter and Phillips-Howard (1997) report that managers are less likely to sign export contracts with female firms and Abor and Biekpe (2006) find that, at least among Ghanian firms, female ownership leads to less use of debt financing. 3 Hallward-Driemeier (2013) presents a comprehensive overview of African data on female firms where, among other things, they are found to be smaller, less productive, have lower human capital and to have more difficulty accessing financial markets. Fasci and Valdez (1998) show that the gender productivity gap is related to underlying gender differences in education, work experience and marital status, among other things. All of these can lead to smaller, less productive female-led firms, something found by Aterido, Beck, and Iacovone (2013) for Sub-Saharan Africa, Bruhn (2009) for Latin America, and Piacentini (2013) for the OECD. 6 See Schank, Schnable and Wagner (2007) or Melitz and Redding (2014) for surveys of these studies. 7 See Weichselbaumer and Winter-Ebmer ( 2005) for a survey of this literature. 8 Oftentimes, this productivity is drawn at some cost from a distribution.1 − * − F X l, g i , 9 To minimize notation, we normalize wages in all locations to unity. 10 In a related approach, Wang (2012) finds evidence of quality improvements in Chinese firms that is created via learning by exporting.
We examine the developments in trade patterns between the former Soviet republics in the years following the initial breakup shock. After a huge fall following the Soviet breakup of the early 1990s, Commonwealth of Independent States (CIS) trade with Russia began improving, and there have been recent formal efforts at Eurasian Economic Integration. This might be taken, a priori, as contrary to the hypothesis of gradual decline in Head, Mayer and Ries (HMR in J Int Econ 81(1):1–14, 2010)—or perhaps as evidence of the power of restored trade agreements, such as the incipient Eurasian Economic Union. We decompose the region’s trade into theory-consistent ‘gravity’ components, in order to analyze dynamic changes in the components since the Soviet era. Despite the sharp falls after 1991, trade in 1995 still shows strong ties, consistent with high dyadic (country pair) components linked to trade specialization. By contrast, in the second decade, the ties (dyads) began to weaken significantly and calibrated trade costs tend to rise, despite attempts at renewed integration. Rather, the sharp improvement in trade volumes was mainly due to the sharp recoveries in GDP levels for both Russia and many of the Central Asian Countries, associated with improvements in the global economy and economic ties with the World (especially with EU and China). We would therefore conclude that the recovery in trade between Russia and Central Asia reflects monadic factors (i.e., the regional economic recovery) and does not contradict the HMR (2010) hypothesis. Nevertheless, further, dynamic analysis shows that there are strong long-run ties within the CIS and Russia, which are not declining, and that sticky post-colonial adjustment does not appear set to eliminate the current bias of trade between these republics.
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