03. Journals

2,963 items available

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http://hdl.handle.net/10986/2210

These are journal articles published in World Bank journals as well as externally by World Bank authors.

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Now showing 1 - 10 of 21

A Test of the Alchian-Allen Conjecture with Transaction-level Trade Data

(Taylor and Francis, 2020-02) Choi, Jieun ; Minondo, Asier

We use Kosovo’s transaction-level import value, tariff duties and transport cost data for very finely disaggregated products to test the Alchian–Allen conjecture. First, we show that the elasticity of freight costs to import prices is much lower than the unitary elasticity predicted by the iceberg transport cost hypothesis. Second, we find that import unit values rise with transport costs and decline with ad valorem tariffs. Our results confirm the Alchian–Allen conjecture that per-unit transport costs reduce the price of high-quality varieties relative to low-quality varieties, raising their relative demand in high freight cost destinations.
Export Structure Upgrading and Economic Growth in the Western Balkan Countries

(Taylor and Francis, 2019) Shimbov, Bojan ; Alguacil, Maite ; Suárez, Celestino

In this paper, we seek to analyze the impact that the ability to produce more sophisticated goods has on the economic performance of the Western Balkan region and to determine the factors fostering this process. To do so, we elaborate an export sophistication index, à la Hausmann. The outcomes obtained show that export sophistication has a positive and significant effect on growth in these economies. Additionally, we found that this process is driven more by the sophistication in medium-skill and technology-intensive manufactures goods rather than through sophistication in high-skill goods. Our findings also confirm that a greater participation in international production networks and a better institutional environment stimulates the upgrading of exports, and the subsequent economic growth of these economies.
Migrant Remittances and Information Flows: Evidence from a Field Experiment

(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Batista, Catia ; Narciso, Gaia

Do information flows matter for remittance behavior? We design and implement a randomized control trial to quantitatively assess the role of communication between migrants and their international network on the extent and value of remittance flows. In the experiment, a random sample of 1,500 migrants residing in Ireland was offered the possibility of contacting their networks outside the host country for free over a varying number of months. We find a sizeable positive impact of our intervention on the value of migrant remittances sent. Larger remittance responses are associated with individuals who are employed and earn higher incomes. This evidence is consistent with the idea that the observed increase in remittances is not a consequence of relaxed budget constraints due to subsidized communication costs but rather a likely result of improved information, perhaps due to better migrant control over remittance use, enhanced trust in remittance channels due to experience sharing, or increased remittance recipients’ social pressure on migrants.
The Health Gains, Financial Risk Protection Benefits, and Distributional Impact of Increased Tobacco Taxes in Armenia

(Taylor and Francis, 2018-01) Postolovska, Iryna ; Lavado, Rouselle ; Tarr, Gillian ; Verguet, Stephane

The majority of Armenian adult males smoke, yet tobacco taxes in Armenia are among the lowest in Europe and Central Asia. Increasing taxes on tobacco is one of the most cost-effective public health interventions, but many opponents often cite regressivity as an argument against tobacco taxation. We use a mixed-methods approach to study the potential regressivity of tobacco taxation and the extent to which the regressivity argument hindered increases in tobacco taxation in Armenia. First, we pursued an extended cost-effectiveness analysis (ECEA) to assess the health, financial, and distributional consequences (by consumption quintile) of increases in the excise tax on cigarettes in Armenia. We simulated a hypothetical price hike leading to a tax rate of about 75% of the retail price of cigarettes, which would be fully passed on to consumers. Second, we conducted a series of stakeholder interviews to examine the importance of the regressivity argument and identify the factors that allowed tobacco tax increases to be adopted as public policy in Armenia. We show that increased excise taxes would bring large health and financial benefits to Armenian households. Half of tobacco-related premature deaths and 27% of associated poverty cases averted would be concentrated among the bottom 40% of the population. Though regressivity was raised as a concern at the initial stages of the policy adoption process, our qualitative stakeholder analysis indicates that the recent accession to the Eurasian Economic Union and the fiscal constraints faced by the government created a window of opportunity for tobacco taxation to be placed on the policy agenda and adopted as government policy, and the ECEA findings were an important input into the process.
Multidimensional Connectivity: Why the Interplay of International Connections Matters for Knowledge Transfers

(Elsevier, 2017-07) Gould, David M. ; Panterov, Georgi

Globalization has increased exponentially since the mid-twentieth century with the advent shipping containers, digital technologies and air transport. Being well-connected has important implications not only for incomes, but the transfer of ideas and growth enhancing technology. This study finds that being connected to well-connected countries matters for economic growth, but there is complementarity in the various types connections that enhances growth as well. Countries can benefit from: (i) multiple types of economic links (such as trade, investment, migration, and modern telecommunications) that underpin the movement of technologies and ideas; but also, (ii) the quality of connections in terms of knowledge spillovers and the indirect connections made through partners that are well connected. These are both aspects of inter-connectedness that have implications for growth and growth spillovers.
Remittances and Vulnerability in Developing Countries

(Published by Oxford University Press on behalf of the World Bank, 2017-02) Bettin, Giulia ; Presbitero, Andrea F. ; Spatafora, Nikola L.

This paper examines how international remittances are affected by structural characteristics, macroeconomic conditions, and adverse shocks in recipient economies. We exploit a novel, rich panel data set, covering bilateral remittances from 103 Italian provinces to seventy-nine developing countries over the period 2005–2011. We find that remittances are negatively correlated with the business cycle in recipient countries and in particular increase in response to adverse exogenous shocks, such as large terms-of-trade declines. This effect is stronger where the migrant communities have a larger share of newly arrived migrants. Finally, we show that recipient-country financial development is negatively associated with remittances, suggesting that remittances help alleviate credit constraints.
Financial Inclusion, Productivity Shocks, and Consumption Volatility in Emerging Economies

(Published by Oxford University Press on behalf of the World Bank, 2016-01) Bhattacharya, Rudrani ; Patnaik, Ila

How does access to finance impact consumption volatility? Theory and evidence from advanced economies suggests that greater household access to finance smooths consumption. Evidence from emerging markets, where consumption is usually more volatile than income, indicates that financial reform further increases the volatility of consumption relative to output. This puzzle is addressed in the framework of an emerging economy model in which households face shocks to trend growth rate, and a fraction of them are financially constrained, with no access to financial services. Unconstrained households can respond to shocks to trend growth by raising current consumption more than the rise in current income. Financial reform increases the share of such households, leading to greater relative consumption volatility. Calibration of the model for pre- and post–financial reform in India provides support for the model’s key predictions.
Learning Dynamics and Support for Economic Reforms: Why Good News Can Be Bad

(Published by Oxford University Press on behalf of the World Bank, 2016-01) van Wijnbergen, Sweder J.G. ; Willems, Tim

Support for economic reforms has often shown puzzling dynamics: many reforms that began successfully lost public support. We show that learning dynamics can rationalize this paradox because the process of revealing reform outcomes is an example of sampling without replacement. We show that this concept challenges the conventional wisdom that one should begin by revealing reform winners. It may also lead to situations in which reforms that enjoy both ex ante and ex post majority support will still not come to completion. We use our framework to explain why gradual reforms worked well in China (where successes in Special Economic Zones facilitated further reform), whereas this was much less the case for Latin American and Central and Eastern European countries.
Aging and Income Convergence in Europe: A Survey of the Literature and Insights from a Demographic Projection Exercise

(Elsevier, 2015-11-25) Crespo Cuaresma, Jesús ; Loichinger, Elke ; Vincelette, Gallina

The current and projected low fertility levels for Europe and the continuous increases in life expectancy imply that the region will go through an unprecedented process of population aging, leading to sizable changes in the age structure of European societies. After reviewing the existing literature on the role played by demographic change as a determinant of economic growth and income convergence, with a focus on the European experience, we analyze the quantitative impact of the projected changes in the age and education composition of the labor force. Using newly available demographic projections, we show that the current demographic trends are expected to cause a slowdown in the speed of income convergence across European countries. Our projection exercise suggests that policies aimed exclusively at improving labor force participation do not appear to be sufficient to counteract the negative effects of aging on income convergence. Instead, we show that reducing the educational attainment gap between Central and Eastern European member states and the rest of the European Union in addition to increasing labor force participation leads to an accelerated pace of income convergence.
Microdynamics of Turkey's Export Boom in the 2000s

(Wiley, 2014-05-14) Cebeci, Tolga ; Fernandes, Ana M.

This paper examines the microdynamics behind the dramatic export boom experienced by Turkey during the 2000s. Using disaggregated exporter-level customs data covering the universe of export transactions for Turkey during the period 2002–11, we characterize firm-level dynamics in the export sector and we decompose export growth at the aggregate, sectoral and destination market levels to identify the role of firm turnover, destination turnover and product turnover. We show that year-to-year aggregate export growth is dominated by growth in continuous exporters, and for these, growth is dominated by exports to their continued destinations and of their continued products. However, the observed high degree of churning across firms, destinations and products accounts for a substantial part of Turkey's export growth over longer periods. The patterns of microdynamics of export growth are verified across sectors and across groups of destination markets with some exceptions regarding exports to new emerging markets where net exporter entry plays a more critical role for export growth over longer periods.