The Economics of State Fragmentation: Assessing the Economic Impact of Secession

Reynaerts, Jo; Vanschoonbeek, Jakob

doi:10.2139/ssrn.2804901

Cited by 4 publications

(2 citation statements)

References 18 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…A first set of papers applies difference-in-differences (Wassmann 2015;Ferrari and Picco 2016;Campos, Coricelli, and Moretti 2014). Another paper, Reynaerts and Vanschoonbeek (2016), implements a DDD estimate similar to the one described here. In this paper we extend this idea to the event study equations.…”

Section: Aggregation Of Effects and The Economic Mechanismsmentioning

confidence: 99%

See 1 more Smart Citation

Do Trade Agreements Contribute to the Decline in Labor Share? Evidence from Latin American Countries

Rozada¹,

Ruffo²

2021

View full text Add to dashboard Cite

In this paper, we explore the role of trade in the evolution of labor share in Latin American countries. We use trade agreements with large economies (the United States, the European Union, and China) to capture the effect of sharp changes in trade. In the last two decades, labor share has displayed a negative trend among those countries that signed trade agreements, while in other countries labor share increased, widening the gap by 7 percentage points. We apply synthetic control methods to estimate the average causal impact of trade agreements on labor share. While effects are heterogeneous in our eight case studies, the average impact is negative between 2 to 4 percentage points of GDP four years after the entry into force of the trade agreements. This result is robust to the specification used and to the set of countries in the donor pool. We also find that, after trade agreements, exports of manufactured goods and the share of industry in GDP increase on average, most notably in the case studies where negative effects on labor share are significant. A decomposition shows that all the reduction in labor share is explained by a negative impact on real wages.

show abstract

Section: Aggregation Of Effects and The Economic Mechanismsmentioning

confidence: 99%

“…Other examples that analyze TA are Billmeier and Nannicini (2013), Hannan (2016), Adarov (2018), Kassa and Coulibaly (2019). Examples that use these methods to analyze other type of agreements are Campos, Coricelli, and Moretti (2014), Wassmann (2015), Ferrari and Picco (2016), Reynaerts and Vanschoonbeek (2016), and Saia (2017).…”

Section: Introductionmentioning

confidence: 99%

Do Trade Agreements Contribute to the Decline in Labor Share? Evidence from Latin American Countries

Rozada¹,

Ruffo²

2021

View full text Add to dashboard Cite

show abstract

Reynaerts

Vanschoonbeek

2021

J of Applied Econometrics

Self Cite

View full text Add to dashboard Cite

This paper provides empirical evidence that declaring independence significantly lowers per capita GDP based on a large panel of countries covering the period 1950-2013. To do so, we rely on a semi-parametric identification strategy that controls for the confounding effects of past GDP dynamics, anticipation effects, unobserved heterogeneity, model uncertainty and effect heterogeneity.Our baseline results indicate that declaring independence reduces per capita GDP by around 20% in the long run. We subsequently propose a novel triple-difference procedure to demonstrate the stability of these results. Another methodological novelty consists of the development of a two-step estimator to shed some light on the primary channels driving our results. We find robust evidence that the adverse effects of independence increase in the extent of surface area loss, pointing to the presence of economies of scale, but that they are mitigated when newly independent states liberalize their trade regime or use their new-found political autonomy to democratize.

show abstract

The lessons Quebec offers to Greece and Europe

Mitsopoulos

Pelagidis

2018

Manage Decis Econ

View full text Add to dashboard Cite

An assessment of the importance of Greece's potential Grexit during the recent crisis is made. Subsequently, the case of the independence movement of Quebec is examined to argue that once perceptions about the separation from a Union take root, they may propagate themselves for long periods of time entrenching an uncertainty that leads to concrete economic damage. Therefore, the need to accelerate “convergence in institutions” among the Union members is highlighted, as is the need to acknowledge that political developments in Greece are in line with the predictions of a growing literature on the causes and impact of political risks.

show abstract

The Economics of State Fragmentation: Assessing the Economic Impact of Secession - Addendum

Cited by 4 publications

References 18 publications

Do Trade Agreements Contribute to the Decline in Labor Share? Evidence from Latin American Countries

Do Trade Agreements Contribute to the Decline in Labor Share? Evidence from Latin American Countries

The economics of state fragmentation: Assessing the economic impact of secession

The lessons Quebec offers to Greece and Europe

Contact Info

Product

Resources

About