Robert M. Stern Globalization and International Trade Policies (2009)

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.The results, which were shown inTable 7, indicated that the higher price effects range from 12 to22 percent in the Asia-Pacific economies, 9 to 18 percent in theAmericas, and generally below 10 percent in the Europeaneconomies.The price impacts for business and economy airfareswere considerably higher but should be interpreted tentatively dueto data constraints.Measurements of the impact of telecommunications regula-tions were derived for 24 OECD and 23 other countries, using datafor 1997.Price-impact measurements of regulation were calculatedfor four major sectors of telecommunications, including trunk,international, mobile, and leasing services and are listed by countryand type of service in Table A-1.While the results suggested thatcountries with more stringent regulatory regimes tended to havehigher telecommunications prices, the authors noted that therewere several cases in which the results appeared to be counter-intuitive and sensitive to small changes in the data.The reportedresults should therefore be treated with caution, pending furtherclarification and improvement of the model and data that were used.Measurements of regulation and impacts on industrial elec-tricity prices for 50 economies, using 1996 data, were developed.The estimated price impacts are listed by country in Table A-2.The impacts ranged from 0 to 35 percent, with a mean of 13 per-cent and a standard deviation of 13 percent.The authors noted,however, that the estimated price impacts were quite sensitive tothe methodology and data used and therefore should be treated asordinal rankings rather than absolute values." Fink et al.(2002) analyzed the importance of restrictive trade poli-cies and private anti-competitive practices for internationalmaritime services.For this purpose, they used data on U.S.imports carried by liners from 59 countries that accounted forabout 65 percent of the total value of U.S.maritime imports in1998.While restrictions on the provision of port services werefound to be significant, private anti-competitive practices involvingcollusion among international maritime cartels were shown tohave a considerably greater influence on maritime transport prices.b723_Chapter-15.qxd 7/15/2009 10:01 AM Page 584584 A.V.Deardorff & R.M.SternGravity-Model EstimatesDeardorff and Stern (1998, p.24) have noted that measurementsbased on the gravity model are useful mainly in identifying relativelevels of protection across sectors and countries.But gravity modelshave some important drawbacks.That is, by attributing to trade bar-riers all departures of trade from what the included variables canexplain, there is a great burden on the model being used.Thus, theworse the model, the more likely it is that trade barrier estimates willhave an upward bias.An additional problem exists when this technique is used to inferbarriers for separate industries.The theoretical basis for the gravityequation, as in Anderson (1979) and Deardorff (1998), applies tototal trade, not to trade in individual sectors.The gravity equationmakes sense at the sectoral level only if all countries are equal in theircapacity to produce in a sector, which of course would be a denial ofthe role of comparative advantage.Thus, if a country were in fact tohave a comparative advantage in a particular service sector, so that itsoutput would be high and its cost of serving its domestic market itselfwould be low, then it will import less from abroad than would beexpected based on income and distance alone.Thus comparativeadvantage may show up as an implicit barrier to trade, when in factnone exists.Computable General Equilibrium (CGE) ModelingIn the study by Brown and Stern (2001), each MNC is assumed toproduce a differentiated product and to allocate production to its var-ious host-country locations.The monopolistically competitive firmsemploy capital, labor, and intermediate inputs in their production,and they set prices as an optimal mark-up of price over marginal cost.The number of firms is permitted to vary to hold MNC profits atzero.Consumers are assumed to allocate their expenditure betweengoods and services that are produced by firms domestically and vari-eties that are imported from each national source.Labor is taken tobe freely mobile among domestic sectors but not across borders.b723_Chapter-15.qxd 7/15/2009 10:01 AM Page 585Empirical Analysis of Barriers to International Services Transactions 585Capital, however, is mobile internationally, although not perfectly so,because there is a risk premium that will vary depending on the sizeof a country s capital stock.Barriers to FDI are assumed to take the form of an increased costof locating investment in a host country.For this purpose, Brown andStern use the cost-price margins estimated by Hoekman (2000), whichhave been discussed above and are listed in Tables 10 and 11, as indica-tive of barriers to FDI.Since the cost-price gap is smallest in mostsectors in Hong Kong, a country thought to be freely open to foreignfirms, the excess in any other country above the Hong Kong figure istaken to be due to barriers to the establishment of foreign firms.Using the aforementioned modeling structure with three sectors(agriculture, manufactures, and services) and 18 countries/regions,Brown and Stern calculate the economic effects of removal of servicesbarriers according to the following three scenarios20:Scenario A: Removal of services barriers, with perfect internationalcapital mobility and fixed world capital stock.Scenario B: Removal of services barriers, with risk-premium elasticity =0.1 to allow for imperfect capital mobility, and fixed world capital stock.Scenario C: Removal of services barriers, with risk-premium elasticity =0.1 to allow for imperfect capital mobility, and world capital stockincreased by 3 percent.When barriers are lowered, international capital in the form ofFDI will then be attracted to countries with the relatively highest ratesof return and away from other countries.The welfare effects, as a percentage of GNP and in billions ofdollars, resulting from the assumed removal of the services barriersfor each of the three scenarios are listed in Table A-7 for the20See also studies undertaken at the Australian Productivity Commission by Dee andHanslow (2001) and Verikios and Zhang (2001) for computational results based ona related modeling framework and with estimates of services barriers taken fromKalirajan et al.(2000) and Warren (2000a,b).b723_Chapter-15.qxd 7/15/2009 10:01 AM Page 586586 A.V.Deardorff & R.M.SternTable A-7.Welfare effects of elimination of services barriers (percent and billions ofdollars).Country Scenario A: Scenario B: Scenario C:Perfect Int l Risk-Premium Risk-PremiumCapital Mobility Elasticity = 0.1 Elasticity = 0.1and Fixed World and Fixed World and World CapitalCapital Stock Capital Stock Stock Increasedby 3%% GNP $Bill.% GNP $Bill.% GNP $Bill.IndustrializedCountriesAustralia 1.8 6.0 1.5 5.0 4.9 16.8Canada 14.8 84.0 12.9 73.7 14.9 85.0European Union 0.5 42.4 0.5 38.0 2.5 202.4Japan -2.0 -103.7 -1.7 -88.4 0.5 25.7New Zealand 9.1 5.2 7.5 4.3 10.5 6.0United States 0.5 35.0 0.3 23.2 3.1 222.5DevelopingCountriesAsiaChina 3.8 26.9 3.2 22.9 6.0 42.8Hong Kong 6.6 6.6 5.4 5.5 13.4 13.5Indonesia 15.6 30.8 13.1 25.8 16.9 33.3Korea -2.8 -12.3 -2.3 -10 [ Pobierz całość w formacie PDF ]

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