International Trade and Finance Association’s 27th International Conference Reply

DA Pole 2During the first week of June Anmar Pretorius and Derick Blaauw attended the International Trade and Finance Association (IT&FA’s) 27th International Conference at the Poznan University of Economics and Business, Poznan, Poland. The topic of the conference was: “Leading Issues in International Trade and Finance”. Delegates from afar as New Zealand, China, India and the United States converged in the beautiful city of Poznan. Both colleagues delivered papers at the conference. Anmar and Derick delivered a joint paper entitled: The Impact of Trade on Stock Market Integration of Emerging Markets. Anmar presented a paper entitled: Exports and Exchange Rate Risk: Analyzing Emerging Market Sectoral Exports – co-authored by Heinrich Nel.

The “Keynote speech” was delivered by Professor Leszek Balcerowicz of the Warsaw School of Economics with the theme “Systematic forces, shocks and economic growth”. Prof Balcerowicz was instrumental in Poland’s economic transition from a centrally planned economy to a market economy. Prof Balcerowicz is a former chairman of the National Bank of Poland and also served as Deputy Prime Minister in Tadeusz Mazowiecki’s government. During the lecture Prof Balcerowicz highlighted the importance of fast and sustainable economic growth without neglecting important social issues as a prerequisite for sustainable development.

This was followed by a Plenary Roundtable, chaired by Joseph Pelzman (George Washington University) with the topic of: “Global Economy in 2017 – Business, Institutional and Academic Perspective”. The rest of the conference consisted of 14 parallel sessions and ended with a guided walking tour of the city centre.

The Society’s President, Prof André Fourçans (ESSEC Business School, Paris) delivered an address at the Gala Dinner on the Economics of Climate Change. Issues dealt with included how economists analyse the phenomenon and its impact.

New contacts were made and the possibility of future engagement was discussed with some of the colleagues of the Poznan University of Economics and Business. Further information on the conference can be found at: http://www.itfaconference.org/

On exporting, wages and inequality Reply

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Carli with the supervisors Proff Marianne Matthee and Neil Rankin

Last week colleague and PhD candidate Carli Bezuidenhout presented her ongoing research at the seminar series of the Department of Economics at Stellenbosch University. In a nutshell…

Unemployment and inequality are two of the major challenges facing South Africa, moreover, the economy is struggling to grow. Exporting has always been advocated as a means to create jobs and grow the economy. Indeed, recent research has shown that South African manufacturing exporting firms do employ more people and pay higher wages than non-exporters.

But, we know from the literature that there is a lot of churning in terms of exporter dynamics – this affects wages and employment and we also know that exporters may contribute to wage inequality. We consider these aspects in the South African context by using the newly made available SARS firm-level data.

The preliminary findings suggests that, indeed the South African manufacturing exporters employ more workers and pay higher wages – they create more and better jobs. But some manufacturing exporters’ jobs are better than others – it depends on the destination they serve, the number of products exported, the number of destinations exported to and the export status. There is this hierarchy for exporting firms to be larger (number of employees) and pay more as you export further away. Firms exporting to the International market (to African countries and outside of Africa) pay more than firms exporting only to Africa. Interestingly the inequality within a firm (wages per person) also increase as you export further away. Therefore, some sort of trade-off exists between the levels of wages and inequality.

The research results are out! 1

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The exports team: Marianne, Tasha, Neil and Carli

Over the past year Prof Marianne Matthee and Carli Bezuidenhout (as PhD student) have been working on a unique research project. In collaboration with UNU-Wider, the National Treasury and SARS they have been using administrative data to examine exports and productivity at firm-level in South Africa. The team also included Prof Neil Rankin from Stellenbosch University and his PhD student Tasha Naughtin. Yesterday they presented the first round of results to the media and other academics in the project at a workshop in Pretoria. Their results show that South Africa’s exports are driven by the large multi-country, multi-product exporters.

Other teams in this project looked at the two-way traders: exporters that use imported inputs, at firm investment, at total factor productivity, at market concentration and mark-ups, as well as at the impact of taxes on sales and profitability. These are exciting times for applied micro researchers interested in firm-level analysis.

Building international links Reply

Our early 2015 research efforts continued this week by building some international ties. Prof Maria Santana-Galego of the University of the Balearic Islands visited the School and met with colleagues the the TRADE and TREES research entities.

Maria SantanaOn Tuesday she presented a paper on how trade linkages serve as a channel for the transmission of different types of crises (exchange rate, financial, sovereign debt crises). Instead of looking only at the volatility of the exchange rate during a crisis, she considers and controls for different exchange rate regimes.

In the process we learned about two cool resources:

Maria also discussed the gravity model approach with colleagues working on export margins and the identification of export opportunities. We hope to see some co-authored papers in the future.