Maria Paula Fontoura

Intra-industry trade by types: What can we learn from Portuguese data?

We provide evidence on intra-industry trade (IIT) in the Portuguese case from 1994 onwards by disentangling vertical from horizontal IIT with two different indexes—the Grubel-Lloyd and the so-called CEPII index- and analyse the determinants of both IIT types. Distinct explanatory factors are identified for each IIT type and we confirm the comparative advantage explanation in the vertical case. The regression results are robust to different estimation methods and to alternative IIT indexes. Nonetheless, sensitivity of the IIT levels to the arbitrary criterion of the CEPII measurement points out to the Grubel-Lloyd index as a preferable method. JEL no. F12, F14

30 Anos de Investigação Sobre Externalidades do IDE para as Empresas Domésticas – Que Conclusões?

During the last three decades a vast literature emerged on the empirical evidence of productivity spillovers from FDI. This is related to the fact that multinational firms own intangible assets which may be transmitted to domestic firms and thereby raise their productivity level. Results obtained so far are however mixed, and it does not seem possible to get a straightforward answer to whether this phenomenon occurs. This paper analyses the most extensive number of studies on the subject surveyed to date, by taking into account intra and inter FDI spillovers. We summarize the different channels for diffusion of FDI spillovers and the effects that may be expected in each case. Some paths for further research on the topic are also delineated, which take into consideration the fact that the existence of the phenomenon appears to depend on the sectoral characteristics and some conditioning factors.

Trade Potential in an Enlarged European Union: A Recent Approach

This paper aims to evaluate the trade potential of manufactured products between countries belonging to the EU in the threshold of its Eastern enlargement. For this purpose we use a Gravity model which is estimated with a Poisson Pseudo-Maximum Likelihood Method. We extend the specification of the gravity model in order to capture bilateral trade specificities between groups of countries of the enlarged EU, allowing to test the statistical significance of these inter-groups’ trade potential. In addition, it includes the Commodity Composition of Trade. The estimated coefficients are used to project exports of each country. We conclude that in 2002 the CEEC as a group had exhausted their export potentialities to the enlarged EU, whereas the same does not apply to its imports from the EU members.

Global value chains and inward foreign direct investment in the 2000s

In this paper, we make use of recent data published by the World Input‐Output Database to: (i) provide evidence on trade in value added of the major Organization for Economic Co‐operation and Development (OECD) member countries and major emerging economies (designated by OE country group), namely by measuring the degree of participation in global value chains (GVCs) at the country and sectoral levels; and (ii) estimate whether the GVC participation of OE countries has positively influenced foreign direct investment (FDI) inward stocks in the 2000s. The pooled regression model estimated shows that the country′s degree of GVC participation has contributed positively for bilateral FDI inward stocks, after controlling for other possible FDI determinants.

Portugal and Poland: Two Different Tales on Export Performance to the European Union in the 2000s

European Union’s enlargement to eastern and central Europe’s countries imposed a challenge to southern Europe’s countries. With similar labor intensive specialization patterns, but much lower production costs and better qualified human capital than eastern and central Europe’s countries, southern Europe faced serious threats to their competitiveness. This chapter compares the export performance of these two groups of countries in the period 2000s through the analysis of two specific representative countries: Portugal and Poland. The study is based on a Constant Market Share analysis, which allows to decompose the export growth into several components; and a combination of revealed comparative indexes with a geographical orientation measure. We conclude that while Poland registered a great and impressive export performance across the analyzed period, increasing around 100 % the country’s market share to the EU15, Portugal has evolved in the opposite direction, with an average market share decrease of 7 %. Although it was not the only factor, we conclude that Poland’s competitiveness effect was essential to explain Poland’s increasing industries export share. Several reasons are proposed for the different course taken by the two countries.

Trade Potential Revisited: A Panel Data Analysis for Zimbabwe

This paper notes that previous results on trade potential based on a panel data set may be biased and proposes the adequate Poisson Pseudo Maximum Likelihood method to estimate trade potential based on the elasticity estimates generated by a gravity model, with conclusions on trade potential based on confidence intervals estimated with the Delta method. This approach had not been yet considered in the literature for panel data. This methodology is used to evaluate Zimbabwe export potential in a period characterized by strong restrictions on trade, based on the elasticity estimates generated by an augmented gravity model for six Southern African Development Community member countries and their exports to the rest of the world. Results show that Zimbabwe has a large unexploited trade potential which will not be realized without political stability and structural reforms. For comparison purposes, we also present the gravity coefficients calculated with other estimation methods.