Trade Adjustment Costs in Developing Countries: - World Bank ...

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Adjustment to Trade Policy in Developing Countries 151In Latin America and some parts of Asia, greater economic openness has comewith increases in the dispersion of wages and income. While the coincidence ofthese outcomes is well established, identifying the channels through which tradeaffects wages has proven to be more difficult. In some instances, greater wage inequalityappears to be a result of developed country firms outsourcing productionto developing country establishments, or developing country firms upgradingthe quality of output they produce. However, the empirical relevance of thesemechanisms is much stronger in some countries (Colombia, Mexico, Hong Kong)than in others (Argentina, Brazil, Chile, India). There are not general empirical resultson how trade affects the structure of wages in developing countries, whichmay be due to the wide variation across countries in industry structures, resourcesupplies, and reform episodes. Because trade does not have a uniform affect onwages, it does not have a uniform affect on household incomes and poverty either.The impact of trade on poverty depends on how falling trade barriers affectthe relative prices of goods consumed by the poor and the demand for factorscontrolled by poor households. In some countries, trade reform appears to havetriggered price changes that help poor households, which in others it has not.While one may want the literature to offer more conclusive results, the data seemunwilling to cooperate.Gordon Hanson is the director of the Center on Pacific Economies and is a professorof economics at UC San Diego.BIBLIOGRAPHYAmiti, Mary, and Don Davis (2008). Trade, Firms, and Wages: Theory and Evidence. NBERWorking Paper no. 14106Attanasio, Orazio, Goldberg, Pinelopi and Nina Pavcnik (2004a). Trade Reforms and IncomeInequality in Colombia. Journal of Development Economics, 74: 331–66—(2004b). Trade Policy and Industry Wage Structure: Evidence from Brazil. World BankEconomic Review 18(3): 319–344Bergin, Paul R, Feenstra, Robert C and Gordon H Hanson (2009a). Volatility due to Outsourcing:Theory and Evidence. Mimeo, UC Davis and UC San Diego—(2009b). Offshoring and Volatility: Evidence from Mexico’s Maquiladora Industry.American Economic Review, forthcomingBernard, Andrew, Stephen Redding, and Peter Schott (2007). Firms in International Trade.Journal of Economic Perspectives 21(3): 105–30Broda, Christian, and Dave E Weinstein (2006). Globalization and the Gains from Variety.Quarterly Journal of Economics, 121(2): 541–585Chiquiar, Daniel (2008). Globalization, regional wage differentials and the Stolper–SamuelsonTheorem: Evidence from Mexico. Journal of International Economics,74(1): 70–93Feenstra, Robert C and Gordon H Hanson (1997). Foreign Direct Investment and RelativeWages: Evidence from Mexico’s Maquiladoras. Journal of International Economics, 42:371–94.—(2003). Global Production and Inequality: A Survey of Trade and Wages, in James Harrigan,ed., Handbook of International Trade, Malden, MA: Basil Blackwell
152Gordon H HansonGoldberg, Pinelopi, Khandelwal, Amit Pavcnik, Nina and Petia Topalova (2008). ImportedIntermediate Inputs and Domestic Product Growth: Evidence from India. NBER WorkingPaper no. 14416Goldberg, Pinelopi and Nina Pavcnik (2003). The Response of the Informal Sector to TradeLiberalization. Journal of Development Economics, 72: 463–96Goldberg, Pinelopi, and Nina Pavcnik (2007). Distributional Effects of Globalization in DevelopingCountries. Journal of Economic Literature, 45(1): 39–82.Hanson, Gordon H (2004).What Has Happened to Wages in Mexico since NAFTA? in ToniEstevadeordal, Dani Rodric, Alan Taylor, Andres Velasco, Eds., FTAA and Beyond:Prospects for Integration in the Americas, Cambridge: Harvard University Press—(2007). Globalization, Labor Income, and Poverty in Mexico. In Ann Harrison, ed., Globalizationand Poverty, University of Chicago Press and the NBER, 417–56Hanson, Gordon H, Mataloni, Raymond and Matthew J Slaughter (2005). Vertical ProductionNetworks in Multinational Firms. Review of Economics and Statistics, 87: 664–78Harrison, Ann (1994). Productivity, Imperfect Competition and Trade Reform: Theory andEvidence. Journal of International Economics, 36 (1–2): 53–73Haltiwanger, John, Kugler, Adriana Kugler, Maurice, Micco, A and C Pages (2004). Effectsof Tariffs and Real Exchange Rates on Job Reallocation: Evidence from Latin America.Journal of Policy Reform, 7(4): 191–208Head, Keith, and John Ries (2002). Offshore production and skill upgrading by Japanesemanufacturing firms. Journal of International Economics, 58: 81–105Helpman, Elhanan, Itskhoki, Oleg and Stephen Redding (2008). Inequality and Unemploymentin a Global Economy. NBER Working Paper no. 14478Hsieh, Chang-Tai and Keong T Woo (2005). The Impact of Outsourcing to China on HongKong’s Labor Market. American Economic Review, 95(5): 1673–87Krishna, Pravin and Devashish Mitra (1998). Trade Liberalization, Market Discipline andProductivity Growth: New Evidence from India. Journal of Development Economics, 56(2):447–62Kugler, Maurice, and Eric Verhoogen. (2009). Plants and Imported Inputs: New Facts andan Interpretation. American Economic Review Papers and Proceedings, forthcomingLevinsohn, James (1993). Testing the Imports-as-Market-Discipline Hypothesis, Journal ofInternational Economics, 35: 1–22Marin, Dalia (2008). A New International Division of Labor in Eastern Europe: Outsourcingand Offshoring to Eastern Europe. Journal of European Economic Association, 4(2-3): 612-622Melitz, Marc J (2003). The Impact of Trade on Intra-industry Reallocations and AggregateIndustry Productivity. Econometrica, 71(6): 1695–1725.Menezes-Filho, Aquino, Naércio and Marc Muendler. (2008). Labor reallocation in responseto trade reform. Mimeo, UC San DiegoMuendler, Marc (2008). Trade, technology, and productivity: A study of Brazilian manufacturers,1986–1998. Mimeo, UC San DiegoPavcnik, Nina. (2002). Trade Liberalization, Exit, and Productivity Improvements: Evidencefrom Chilean Plants. Review of Economic Studies, 69: 245–76—(2003). What explains skill upgrading in less developed countries? Journal of DevelopmentEconomics, 71: 311–28Porto, Guido G. (2006). Using survey data to assess the distributional effects of trade policy.Journal of International Economics, 70(1): 140-160.Revenga, Anna L (1997). Employment and Wage Effects of Trade Liberalization: The Caseof Mexican Manufacturing. Journal of Labor Economics 15(3): S20–43.
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THE WORLD BANKTrade Adjustment Cost
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Trade Adjustment Costs in Developin
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Trade Adjustment Costsin Developing
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viiiContents10. Trade Adjustment an
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List of Tables2.1 Simulated Adjustm
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List of Figures2.1 Worker Flows 262
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PrefaceThe process of globalization
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2Bernard Hoekman and Guido Portopri
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4Bernard Hoekman and Guido Portoequ
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6Bernard Hoekman and Guido Portowou
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8Bernard Hoekman and Guido Portoass
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10Bernard Hoekman and Guido Portoco
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12Bernard Hoekman and Guido PortoJa
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14Bernard Hoekman and Guido Portoma
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16Bernard Hoekman and Guido Portoju
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18Bernard Hoekman and Guido Portoat
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20Bernard Hoekman and Guido PortoRE
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PART AADJUSTMENT COSTS
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26Carl Davidson and Steven Matusz2.
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28Carl Davidson and Steven Matuszne
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30Carl Davidson and Steven Matuszwh
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32Carl Davidson and Steven MatuszTa
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34Carl Davidson and Steven MatuszSo
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36Carl Davidson and Steven MatuszHi
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38Erhan Artuç and John McLarenof i
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40Erhan Artuç and John McLarenshoc
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42Erhan Artuç and John McLaren1.3
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44Erhan Artuç and John McLarenassu
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46Erhan Artuç and John McLarenin A
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48Erhan Artuç and John McLarenavai
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50Erhan Artuç and John McLarencomp
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52Erhan Artuç and John McLarenFigu
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4Reallocation and Adjustment in the
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Reallocation and Adjustment in the
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5Trade Reforms in Natural-Resource-
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Trade Reforms in Natural-Resource-A
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90Olivier Cadot, Laure Dutoit and M
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Page 161 and 162: 144Gordon H HansonOn the theory sid
Page 163 and 164: 146Gordon H Hansonberg et al. (2008
Page 165 and 166: 148Gordon H HansonThe expansion of
Page 167: 150Gordon H Hansonshares and factor
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Page 189 and 190: 172Pravin Krishna and Mine Zeynep S
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Page 215 and 216: 198Gordon H Hanson3.0%2.8%2.6%2.4%2
Page 217 and 218: 200Gordon H HansonTable 12.2: Share
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202Gordon H HansonWho benefits from
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204Gordon H HansonAn older and larg
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206Gordon H HansonTo date, the lite
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208Gordon H Hansontion surplus was
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210Gordon H HansonSome evidence sug
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212Gordon H HansonBIBLIOGRAPHYAcost
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214Gordon H HansonMishra, Prachi 20
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216James Harrigan• China had been
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218James Harrigan2.2 Price and quan
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220James HarriganFigure 13.1a: Pric
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222James Harrigan4. CONCLUSIONThe e
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224Beata S Javorcikices, thus benef
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226Beata S Javorcikfor plants which
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228Beata S JavorcikAs the majority
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230Beata S Javorcik5. DOES FDI LEAD
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232Beata S Javorcikthough they do n
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234Beata S Javorcik7. FUTURE RESEAR
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236Beata S JavorcikMarkusen, James
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238Chad P Bownthese theories has on
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240Chad P Bownicy changes affect th
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242Chad P Bownis, the policy-imposi
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244Chad P Bownsignificant distortio
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246Chad P Bownaccession period led
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248Chad P Bown2002-03. 16 However,
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250Chad P Bowntive adjustment impac
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PART CFACTORS THATAFFECT TRADE
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256David Hummelsative advantage for
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258David Hummelsprices shift demand
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260David HummelsThe second form of
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262David Hummelsdogenous to how pro
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17The Duration of Trade Relationshi
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The Duration of Trade Relationships
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18Openness and Export Dynamics:New
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Openness and Export Dynamics: New r
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19Market Penetration Costs andInter
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Market Penetration Cost and Interna
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20Taking Advantage of Trade:The rol
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Taking Advantage of Trade: The role
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21Credit Constraints and the Adjust
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Credit Constraints and the Adjustme
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332Miet Maertens and Jo Swinnenmeas
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334Miet Maertens and Jo Swinnenverg
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336Miet Maertens and Jo Swinnenacti
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338Miet Maertens and Jo Swinnenfirm
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340Miet Maertens and Jo SwinnenBIBL
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342Miet Maertens and Jo SwinnenRear
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23Notes on American Adjustment Poli
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Notes on American Adjustment Polici
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362Johan F M Swinnen and Kristine V
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This book summarizes the state of k
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