Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This report examines how Nepal could move away from a remittance-driven growth model by reforming its trade policies to increase competitiveness. It looks at the extent to which Nepal has been tapping into its trade potentials, the underlying obstacles that it faces, and the type of reforms that could turn trade and investment into a vehicle for growth. Five key messages emerge. First, Nepalese exporters remain small and struggle with increase their shipments once they enter a new market, rather than with the fixed cost associated with entering. This is due to severe supply-side constraints that affect their trade and production costs. Second, Nepalese firms underutilize existing trade agreements and granted trade preferences. Third, diversification opportunities lie in fast-growing economies in East Asia and the Pacific. Efforts regarding connectivity, trade facilitation and export intelligence could help firms get to those markets. Fourth, to reduce the anti-export bias of its trade policy, Nepal needs to simplify its tariff code, reduce tariffs on intermediates, and embrace deeper integration, starting with more openness to services and investment. Fifth, trade reforms in Nepal are welfare enhancing and, on average, pro-poor.

Export Competitiveness --- Foreign Trade Promotion and Regulation --- Law and Development --- Trade Facilitation --- Trade Law --- Trade Policy

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper examines productivity dynamics and drivers for Pakistani firms listed in the stock exchange (publicly listed firms) over 2012-17. It relies on policy and outcome measures of integration in upstream merchandise and services sectors, to assess their impact on productivity downstream. The paper presents three main findings. First, the productivity of publicly listed firms remained stagnant over the period, in line with macro-level indicators for Pakistan. Second, foreign-owned or exporting firms are more productive than domestic-owned or domestic-oriented firms. Foreign investors target more productive firms, and their productivity grows after being acquired. Exporters tend to exhibit productivity growth after becoming exporters. Third, increased import duties on intermediates, or reduced levels of foreign direct investment in upstream services sectors, are associated with decreases in the total factor productivity of firms downstream. Gains from lower input tariffs accrue to those that do not secure duty exemption schemes - domestic-oriented firms or smaller exporters. Gains from upstream services foreign direct investment accrue mostly to firms that are further from the productivity frontier. Taken together, these results suggest that productivity growth in Pakistan would benefit from increased exposure of upstream sectors to global markets.

Direct Foreign Investment --- Duty Exemptions --- Enterprise Development and Reform --- Export Competitiveness --- Exports --- Foreign Direct Investment --- Intermediate Inupts --- International Economics and Trade --- Investment and Investment Climate --- Macroeconomics and Economic Growth --- Multinational Enterprise --- Private Sector Development --- Private Sector Economics --- Tariffs --- Total Factor Productivity --- Trade and Investment

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper examines export diversification along the product and market dimensions for selected countries in the Europe and Central Asia region and, more generally, export performance. While the latter is extraordinary, with average export growth rates above 10 percent, the evidence on diversification is less impressive, and hints at a role played by the interaction of natural resource abundance and the commodity price boom. A cross-country analysis including 171 economies suggests that the region's resource rich countries are less diversified than would be expected given their resource endowments, level of development, and size. The commodity boom period was associated with an increase in concentration for the resource rich along the product dimension: they did not increase the number of products exported and became more reliant on oil and gas. During the same period, the resource poor increased their export product scope while maintaining other concentration indices unchanged. A similar but milder pattern is found for diversification along the destination dimension.

Commodity Boom --- Export Diversification --- Extensive and Intensive Margins --- International Economics & Trade --- Macroeconomics and Economic Growth --- Poverty Reduction --- Resource Abundance

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper examines patterns of market integration for food commodities in India. First, it tests the extent of domestic spatial market integration for retail and wholesale markets in 2006-14 and 2008-15, respectively, and looks at patterns of price transmission of shocks from international sources. Second, it measures vertical integration from wholesale to retail markets and tests for asymmetric speed of adjustment to shocks. Third, it examines the determinants of spatial integration. The results reveal that in India, food markets are imperfectly integrated across space, with the law of one price being systematically rejected, with heterogeneities across states and products. There is substantial co-movement between wholesale and retail prices, although integration is still imperfect in all commodities but one: rice, for which perfect vertical integration cannot be rejected. Retail prices adjust faster when wholesale prices rise than when wholesale prices fall. The analysis of the determinants of spatial integration reveals that prior to implementation of the Goods and Services Tax, the mere act of crossing a state border increased prices; unexploited gains from arbitrage persisted after considering the effects of transport costs; and information frictions and menu costs reduced market integration.

Asymmetric Price Transmission --- Border Effects --- Food Security --- Hydrology --- International Economics and Trade --- International Trade and Trade Rules --- Law of One Price --- Market Integration --- Panel Cointegration --- Pass Through --- Speed of Adjustment --- Trade and Services --- Transport --- Water Resources

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Preferential trade agreements are growing in number and deepening in content by incorporating disciplines that go beyond market access. They increasingly encompass non-trade-related disciplines as diverse as intellectual property rights, environment laws, or labor market regulations. Moreover, because investment is complementary to trade, preferential trade agreements provide relevant institutional frameworks to partner countries that wish to regulate their foreign investments. This paper studies the impact of deep trade agreements on foreign direct investment and examines three sub-questions. First, is the impact of trade agreements on foreign direct investment heterogeneous across types of business activity Second, is this impact heterogeneous across disciplines covered in the agreements Third, does the level of development of home and host countries matter for this impact The analysis exploits the World Bank's data set on the content of preferential trade agreement and data on announcements of bilateral greenfield investment at the activity level. The findings show that deep trade agreements matter for investment: every additional discipline in a preferential trade agreement increases foreign direct investment by 1.4 percent, on average. Deep agreements do not impact foreign direct investment in natural resources and extractive activities and have heterogeneous effects across manufacturing- and services-related activities. The results also reveal that disciplines that go beyond the mandate the World Trade Organization matter more for foreign direct investment. Disciplines related to investment liberalization and protection, intellectual property rights, or migration increase foreign direct investment, whereas disciplines on labor market regulations reduce investment. The results are mostly driven by investment between developed and developing countries.

Deep Integration --- Foreign Direct Investment --- Globalization and Financial Integration --- International Economics and Trade --- International Trade and Trade Rules --- Preferential Trade Agreements --- Regional Trade Agreement --- Regional Trade Integration --- Regionalism --- Trade Agreements --- Trade and Regional Integration --- Trade Finance and Investment