Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractEU-TE trade is increasingly characterised by intra-industry trade. For some countries (Czech Republic), the share of intra-industry trade in total trade with the EU approaches 60 percent. The decomposition of intra-industry trade into horizontal and vertical shares reveals overwhelming vertical structures with strong quality advantages for the EU and shrinking quality advantages for TE countries wherever trade has been liberalised. Empirical research on factors determining this structure in an EU-TE framework has lagged theoretical and empirical research on horizontal trade and vertical trade in other regions of the world. The main objective of this paper is, therefore, to contribute to the ongoing debate over EU-TE trade structures, by offering an explanation of intra-industry trade. We utilize a cross-country approach in which relative wage differences and country size play a leading role. In addition, as implied by a model of the product-quality cycle, we examine income distribution factors as determinates of the emerging EU-TE structure of trade flows. Using OLS regressions, we find first, that relative differences in wages (per capita income) and country size explain intra-industry trade, when trade is vertical and completely liberalized and second, that cross country differences in income distribution play no explanatory role. We conclude that if increasing wage differences resulted from an increasing productivity gap between high-quality and low-quality industries, then vertical structures will, over the long-term create significant barriers for the increase in TE incomes and lowering EU-TE income differentials.JEL Classification F13
Corruption research in economics has a long history. Seminal early articles, and older findings contrast with newer developments which have as yet not been measured empirically; in particular the link between corruption and innovating activities suffers from multiple results, on both a national country and company or firm level. This paper examines the corruption-innovation link in transition and emerging countries as the decision to corrupt, and the ability to innovate may not be independent. An endogenous switching regression model is advocated as a suitably methodological way of modeling the joint determination of a firm’s innovation and possible bribes as it implies not only a selection between corrupted and non-corrupted firms, but also heterogeneous effects on innovative activities. The paper shows that, when the selection effect is adequately considered, different firms’ strategies arise. In particular, the treatment effect of corruption on innovation is positive for corrupting firms and negative for non-corrupting firms. Corrupting firms appear rational because paying bribes increases their innovative activities. However, non-corrupting firms also appear rational because in the presence of bribes, their innovating activities would be fewer. Thus, when the selection effect is adequately considered, the effects of so-called “greasing-and-sanding-the-wheels” can co-exist. Finally, the role of competition is also considered. Building on these results, future research can move forward to re-examine economic outcomes such as the productivity or the economic impact of corruption, in the presence (or absence) of selection processes.
The labour market misfortunes of the less skilled and rapid growth of international trade in manufactured goods with less advanced countries are linked by the paradoxical observation that trade theorists are in the forefront of those denying the importance of trade in income distribution. This paper analyses this conclusion by stressing the importance of vertical differentiation of trade flows and regional differentiation of skills in order to identify labour market effects of trade integration. Vertical and regional differentiation in trade and labour markets are analysed for a country, Italy, where these two elements seem to play a crucial role. The results show a likely displacement effect on unskilled labour due to trade flows with less advanced countries. Given the characteristics of Italian trade and labour markets, a stronger trade-induced displacement effect on demand for unskilled labour takes place in the North of the country. Thus the vertical differentiation in Italian intra-industry trade is a warning against understating the effect of trade on labour markets if product heterogeneity is not adequately considered. The regional differentiation of skill intensity is another warning against understating the effect of trade on labour markets whenever cross-sectoral effects and the change in relative specialization are not adequately considered.
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