The Role of Distance in Determining International Transport Costs: Evidence from Philippine Import Data

This paper presents an empirical investigation of the appropriateness of distance as a determinant of international transport costs by using Philippine import data. This study addresses three specific questions. First, does distance really matter in the determination of transport costs? Second, if distance is a significant factor, what is the magnitude of its impact? Third, does the impact of distance on transport costs vary by commodity? Results indicate that while distance is important in determining transport costs, using distance alone as the proxy of international transport costs is insufficient, and such use underestimates the impact of distance on international transport costs. Results also indicate that the impact of distance varies across commodity groups, but it is difficult to precisely determine the direction and the magnitude of this impact.

Smuggling and import duties in Myanmar

This paper examines the effects of import duties on smuggling in Myanmar. Following Fisman and Wei (2004), the reporting discrepancies between Myanmar’s imports records and corresponding exports recorded by trading partners are regarded as indicative of smuggling. The paper studies whether reporting discrepancies differ across trading partners as well as across time. Our main findings are first, that the hike in import duties in June 2004 helped to widen the reporting discrepancies, which suggests smuggling for tax evasion purposes and second, that reporting discrepancies differ considerably across trading partners: land borders appear to be particularly attractive venues for smugglers.

How do free trade agreements change import prices? : firm-level evidence from China's imports from ASEAN

The literature has revealed the positive impacts of free trade agreements (FTAs) on export prices by employing product-level trade data. This paper empirically examines the impacts of FTAs on import prices at the firm level. We focus on firm-level imports in China from ASEAN countries by employing China’s firm-product-level trade data. As a result, controlling for firm characteristics and product characteristics, we could not find significantly positive impacts of an FTA’s entry into force on import prices of FTA eligible products. Instead, we found a significant increase in import quantities of FTA eligible products. Thus, at the firm level, the gains from FTAs for exporters may be the increase in export quantities rather than the rise in export prices.

Why do oil importers diversify their import sources politically? : evidence from U.S. firm-level data

International politics affects oil trade. But why? We construct a firm-level dataset for all U.S. oil-importing companies over 1986-2008 to examine what kinds of firms are more responsive to change in "political distance" between the U.S. and her trading partners, measured by divergence in their UN General Assembly voting patterns. Consistent with previous macro evidence, we first show that individual firms diversify their oil imports politically, even after controlling for unobserved firm heterogeneity. We conjecture that the political pattern of oil imports from these individual firms is driven by hold-up risks, because oil trade is often associated with backward vertical FDI. To test this hold-up risk hypothesis, we investigate heterogeneity in responses by matching transaction-level import data with firm-level worldwide reserves. Our results show that long-run oil import decisions are indeed more elastic for firms with oil reserves overseas than those without, although the reverse is true in the short run. We interpret this empirical regularity as that while firms trade in the spot market can adjust their imports immediately, vertically-integrated firms with investment overseas tend to commit to term contracts in the short run even though they are more responsive to changes in international politics in the long run.

Measuring the costs of FTA utilization : evidence from transaction-level import data of Thailand

In this study, we measure the utilization costs of free trade agreement (FTA) tariff schemes. To do that, we use shipment-level customs data on Thai imports, which identify not only firms, source country, and commodity but also tariff schemes. We propose several measures as a proxy for FTA utilization costs. The example includes the minimum amount of firm-level savings on tariff payments, i.e., trade values under FTA schemes multiplied by the tariff margin, in all transactions. Consequently, the median costs for FTA utilization in 2008, for example, are estimated to be approximately US$2,000 for exports from China, US$300 for exports from Australia, and US$1,000 for exports from Japan. We also found that FTA utilization costs differ by rule of origin and industry.

Stability of complementarity between Japanese FDI and import of intermediate goods : agglomeration effects and parent-firm heterogeneity

This paper examines the duration of intermediate goods imports and its determinants for Japanese affiliates in China. Our estimations, using a unique parent-affiliate-transaction matched panel dataset for a discrete-time hazard model over the 2000–2006 period, reveal that products with a higher upstreamness index, differentiated goods, and goods traded under processing trade are less likely to be substituted with local procurement. Firms located in more agglomerated regions with more foreign affiliates tend to shorten the duration of imports from the home country. For parent-firm characteristics, multinational enterprises that have many foreign affiliates or longer foreign production experience import intermediate goods for a longer duration.

Effect of import time on export patterns

This study examines how the importing process time affects export patterns at an establishment level. We first theoretically discuss the effects of import time on not only exports but also export shipment frequency and exports per shipment. Then, we derive some propositions regarding those effects. Next, by employing highly detailed customs data for Thailand from 2007 to 2011, we empirically investigate those propositions. In this study, the time to import is measured at an establishment level using the difference between the dates on which import shipments arrived in ports and then were released from the container yard. Our main finding is that a longer time reduces total exports, particularly through decreasing export frequency. Significantly negative effects on exports per shipment appear in some specific cases. A longer time to import also reduces total imports, particularly through decreasing import frequency.

Japanese import survey : descriptive analysis

Food importers, such as wholesalers and food processing firms, play an important role in sourcing food from abroad. They are also responsible for ensuring that imported food meets the food safety standards of the importing country. Often, assurance of conformity is done in collaboration with exporters. Thus, importers can influence how supply chains in developing countries are organized. This paper uses a unique dataset obtained from the Japanese market to examine how importers select suppliers and assure food quality.