We empirically evaluate whether participation in the U.S. Department of Agriculture's Broadband Loan Program, which began making loans in 2002, has had measurable positive impacts on zip code-level economic outcomes. Using difference in differences and propensity score matching program evaluation techniques, we find that loans made in 2002 and 2003 under the Pilot Broadband Loan Program have had a substantial positive impact on employment, annual payroll, and the number of business establishments in recipient communities. However, a more spatially disaggregated analysis reveals that the positive economic impacts of the pilot program are driven primarily by the outcomes in communities located closest to urban areas. Finally, we find no evidence that loans received as part of the current Broadband Loan Program have had a measurable positive impact on recipient communities, possibly because not enough time has elapsed for the impacts of the current Broadband Loan Program to have emerged. Copyright (c) 2010 Copyright the Authors. Journal compilation (c) 2010 Wiley Periodicals, Inc..
I extend Cho, Sheldon, and McCorriston's (2002) analysis of the effect of exchange rate volatility on agricultural trade among the G-10 countries to a broad sample of developed and developing nations. I replicate their original finding that exchange rate volatility has a large negative impact on agricultural trade between G-10 members. After controlling for agricultural export subsidies, which are correlated with exchange rate volatility, I show that the original impact declines by half. Using the extended sample, I find that the effect of exchange rate volatility is much larger for developing country exporters than for developed exporters. Copyright 2008, Oxford University Press.
The transition economies of Central and Eastern Europe (CEE) have become important exporters of many types of services to Western Europe. We identify the sources of CEE's advantages over competing exporters, such as India, China and Brazil, using disaggregated data on service exports and a novel estimation technique for the gravity equation. Our results indicate that the importance of geographical distance varies substantially across types of service exports. Geography is important for exports of construction services, but it has a negligible impact on computer-related services. However, the relative quality of legal institutions influences trade across a broad range of service categories. The results demonstrate that aggregating services that are not homogeneous could conceal important differences in the effects of geographical distance and other variables on the pattern of service trade. Copyright (c) 2010 The Authors. Journal compilation (c) 2010 The European Bank for Reconstruction and Development.
We evaluate the impact that the USDA’s low‐cost broadband loan programs have on the U.S. agricultural sector. The broadband loan programs increase access to high‐speed Internet in recipient communities, which can raise farm sales by increasing both farm output and prices received by producers. Further, high‐speed Internet may drive down costs by providing information on cheaper inputs and better management practices, leading to an overall improvement in farm profits. Using U.S. county‐level data on farm sales and expenditures in 2000 and 2007, we employ an inverse probability weighting technique to control for endogenous selection in an econometric model that also accounts for spatial dependence. We find that the two USDA broadband loan programs have had positive causal impacts on farm sales, expenditures, and profits in a subset of rural counties—those adjacent to metropolitan counties—but not in other types of counties.
Plant-level panel data from Mexico's Annual Industrial Survey is employed to evaluate the impact of reductions in tariffs and import license coverage on final goods, as well as intermediates, on firms' investment decisions. Using data from 1984 to 1990, a period during which a large scale trade liberalization occurred, a dynamic investment equation is estimated using the system-GMM estimator developed by Arellano and Bover (1995) and Blundell and Bond (1998). Consistent with theory, the empirical analyses show that a reduction in import protection on final goods leads to lower plant-level investment, whereas reductions in tariffs and import license coverage on intermediate inputs result in higher investment. Also, firms with larger import costs experience a larger increase in investment following a reduction in import protection. On the other hand, higher markup firms lower investment more aggressively following reductions in tariffs and import license coverage on final goods.
Theoretical models of market entry imply that sunk costs are an important factor in the decision to export. Following Helpman, Melitz, and Rubinstein (2008), we develop a simple model of foreign market participation and use a Bayesian method to estimate the resulting dynamic discrete-choice model with lagged dependent variable. Employing a balanced panel data that follows 81 trading partners for 30 years from 1971 to 2000, we estimate our model and compute the marginal effect of sunk costs on the likelihood of export market participation. We find that such costs are economically and statistically important for trade in all of the six major agricultural commodities (Cereals, Dairy, Fish, Meat, Vegetables and Fruits, and Sugar), for agricultural producers in both developed and developing countries. We also find evidence suggesting that, in general, market access for both developed and developing exporters had improved in the years following the Uruguay round of trade negotiations (1995)(1996)(1997)(1998)(1999)(2000).JEL classifications: C11, F14, Q17
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