Silvia Nenci

Network Analysis of World Trade Using the BACI-CEPII Dataset

Abstract In this paper we explore the BACI-CEPII database using Network Analysis. From the visualization of the World Trade Network, we define and describe its topology, both in its binary version and in its weighted version, by calculating and discussing a number of the commonly used network statistics. We finally discuss various specific topics that can be studied with Network Analysis and International Trade data, both at the aggregated and at the sectorial level. The analysis is carried out with multiple software (Stata, R and Pajek). The scripts to replicate part of the analysis are included in the appendix and can be used as a hands-on tutorial. Moreover, local and global centrality measures, based on the unweighted and the weighted version of the aggregated World Trade Network, have been calculated for each country (178 in total) and each year (from 1995 to 2010) and can be downloaded from the CEPII webpage.

Assessing the trade impact of the European Neighbourhood Policy on the EU-MED Free Trade Area

The European Neighbourhood Policy (ENP) set an additional objective for the Southern Mediterranean Countries (SMCs): the prospect of ‘a stake in the internal market’. The launch of this new policy has been the occasion for a revival of empirical studies aimed at assessing the impact of the EU-MED partnership on bilateral trade. The novelty of this work is twofold: (i) to present nonparametric matching estimators besides gravity estimates; (ii) to assume as a counterfactual of the treatment the ex-post long-run average treatment effects of the Europe Agreements. By controlling for likely selection bias and country and time heterogeneity, using both qualitative and quantitative measures of the policy variable, we assess ex-post the trade-enhancing impact of the EU preferential agreements towards SMCs and ex ante the actual efficacy of the ENP.

Tariff Liberalisation and the Growth of World Trade: A Comparative Historical Analysis of the Multilateral Trading System

The aims of this study are to assess the relationship between tariff barriers and world trade growth from a comparative and historical perspective, and to derive some useful indications for evaluating the effectiveness of the current multilateral trading system for promoting world trade. The novelty of this work is the complex reconstruction of a historical tariffs and trade series for the period 1870–2000, for 23 countries; this constitutes a good proxy for world trade (accounting for over 60 per cent) in this period. The effect of tariff liberalisation on trade growth is analysed empirically using panel data and time series. The results, while confirming the existence of a world level long�?term relationship between tariff reductions and trade growth, demonstrate how this substantial and significant relationship pre�?World War II gradually diminished in importance and significance after 1950. This result does not conflict with the key role of the General Agreement on Tariffs and Trade/World Trade Organization system in trade liberalisation; however, it underlines the importance of a formalised multilateral trading system, not so much for tariff liberalisation, but for building a virtuous process of international coordination of trade policies and ensuring fuller participation in world trade.

Does Tariff Liberalization Promote Trade? Latin American Countries in the Long-Run (1900-2000)

This paper estimates the effect of trade liberalization on import performance of selected Latin American countries (which account for about 85 per cent of total Latin America imports). The novelty of this study is that it applies a long-term approach covering the whole XX century using times series and panel data analyses. The empirical exercise shows that the relationship between (lower) tariffs and import growth in Latin America cannot be taken for granted, as it often happens in the literature, and whenever it exists, it is not always quantitatively substantial. In particular, our analysis shows the existence of a long run relationship between tariffs and imports only from the second half of the XX century. It follows that trade liberalization appears effective in fostering Latin Americas trade growth only when integrated within a wider process, implying a multilateral and negotiated approach to trade policy. In this sense, multilateral and regional agreements appear to have played a key role not only through tariff reduction but remarkably thanks to the creation of a rule-based system governing global trade relations, through which uncertainty was reduced and the spread of best practices promoted. This result would confirm the thesis of those who endorse the existence of a formalized trading system to guarantee tariff liberalization and foster trade growth.

The Trade Specialization of China, India, Brazil, and South Africa: A Threat to Whom?

This article looks at the characteristics and evolution over the last ten years of the commodities trade specialization of China, India, Brazil, and South Africa (CIBS). Unlike earlier studies, this work offers an evolutionary and comprehensive assessment of the trade challenges posed by CIBS to the global trading system. To this end, we adopt the notion of “trade specialization cluster,” i.e., a group of countries sharing a common trade specialization at a level higher than experienced in countries outside the group. Clusters are drawn by using the crisp cluster technique. Our findings contribute to partial mitigation of the pessimistic view which looks at CIBS as a source of threat to the developed world—with the relevant exception of China—while highlighting a competitiveness threat for developing countries.

Trade Patterns and Trade Clusters: China, India, Brazil and South Africa in the Global Trading System

The present paper analyzes the evolution of the specialization and trade patterns of China, India, Brazil and South Africa (CIBS) and other WTO countries. It aims to provide an answer to the following questions: is there a tendency to a multi-polarization of trade patterns? If so, is CIBS’ rise leading to new clusters with or among CIBS or other emerging countries? Also, ultimately, does this multi-polarization have a regional element to it? The paper deals with the above questions by presenting: i) a world map of trade clusters involving WTO countries and CIBS; ii) a comparison of the above clusters and their key characteristics in the last decade; and iii) the key drivers of clusters’ trends. The novelty of this study is twofold: first, it adopts a more comprehensive dataset for a wide range of countries and trade dimensions; second, it provides an evolutionary look at the clusters’ trends. The empirical results do not show neither a remarkable phenomenon of multi-polarization, nor evidence of CIBS as a significant separate group and/or regional agglomeration

Agricultural (Dis)Incentives and Food Security: is there a link?

Abstract Using the World Bank database “Distortions to agricultural incentives,” this paper analyzes the impact that agricultural (dis)incentives have on food security for a wide sample of countries over the 1990‐2010 period. We adopt a continuous treatment approach applying generalized propensity score matching to reduce potential biases stemming from differences in observed country characteristics. The results provide strong evidence of self‐selection and heterogeneous food security impacts at different levels of policy intensity. Estimates of the dose‐response functions show that both discrimination against agriculture and large support for it lead to poor performance in the availability, access, and utilization dimensions of food security. JEL codes: C21, F14, F60, O50, Q17.

Are EU trade preferences really effective? An impact evaluation assessment of the Southern Mediterranean Countries’ case

Abstract This work assesses the causal impact of the EU trade preferences granted to the Southern Mediterranean Countries (SMCs) in agriculture and fishery products over the period 2004–2014. It overcomes some of the weaknesses of previous assessments and presents several methodological improvements. Firstly, it relies on a continuous treatment – i.e. preferential margins – to capture the ‘average treatment effect’ of trade preferences, rather than on a binary treatment based on dummy variables. Secondly, it uses highly disaggregated data at sectoral level in order to evaluate properly the preferential treatment. Thirdly, it applies a non-parametric matching technique for continuous treatment – specifically, a generalized propensity score matching. The results show, on the one hand, that the impact of the EU preferences is positive and significant on SMCs trade and is better evaluated using impact evaluation techniques. On the other hand, they demonstrate that the relationship between preferences and trade flows is asymmetric and warn against the risk of providing too much of a good thing. These results raise important issues for policy-making. First, they demonstrate that raising the level of preferences is not the solution to foster the SMCs trade towards EU. Second, that the policy-makers should put more emphasis on complementary factors other than trade barriers.

International Linkages, Value-Added Trade, and Firm Productivity in Latin America and the Caribbean

This chapter addresses the following research questions: (i) Are firms characterized by international linkages more productive than other firms? (ii) Are those belonging to industries more involved in GVCs even more productive? To this end, we combine the World Bank Enterprise Survey dataset with the new OECD-WTO TiVA dataset and present three main empirical exercises: (1) an analysis of productivity premia associated with participation in international trade and presence of inward FDI; (2) a Cobb–Douglas output function expanded to firms’ international linkages; (3) a further expanded version of the above relationship including the TiVA-based indicators of value added trade and industry participation and position in the global value chain. Our empirical outcomes confirm the presence of a positive causal relationship between participation in international activities and firm performance in the LAC region. Focusing on four big Latin American countries we show that the actual level of involvement into GVCs matters as well.

The Trade Competitiveness of Southern Emerging Economies: A Multidimensional Approach Through Cluster Analysis

This paper investigates the trade competitiveness of the new emerging Southern economies – China, India, Brazil and South Africa (CIBS) – with respect to their main global partners. Starting from the commonly held view that countries with trade patterns similar to those of emerging countries are likely to suffer losses, we propose a multidimensional approach based on cluster analysis, both crisp and fuzzy, as an alternative strategy for assessing similarity in global trade patterns. On the basis of key trade characteristics drawn from the diverse strands of trade theory, we assess the relative position of CIBS within global trade patterns and their evolution over time. Unlike previous studies, our results do not support the hypothesis of the presence of a competitiveness threat from Southern emerging countries towards the main industrialised economies.