Abstract: As preferential trade agreements (PTAs) have grown in their scope and complexity, so too has the need to capture this heterogeneity in assessments of their effects. This paper demonstrates an approach for estimating the effects of “deep” PTAs that allows for non-linear impacts from increased depth. It finds that deeper PTAs can increase trade but that there are diminishing—and eventually negative—marginal returns from adding additional policy provisions. This finding fits the observation that certain deep policies may represent new frictions to trade rather than facilitation efforts. To illustrate the potential trade and welfare gains that can be attained by increasing the depth of shallow PTAs, a series of counterfactual simulations are undertaken using the Agadir agreement between Egypt, Jordan, Morocco, and Tunisia as an example. The counterfactual analysis suggests that increasing the depth of the relatively shallow Agadir agreement could increase trade between its members by about 13 percent and the value of their real manufacturing outputs by up to 0.3 percent. Notably, the exercise demonstrates that the optimal version of an agreement is not necessarily the deepest.
Abstract: Technology diffusion and spillovers are key drivers of both innovation and economic growth. This paper examines the role of obtaining initial intellectual property rights on international knowledge flows, specifically through new technological entrants into the United States. We find causal evidence that a foreign technological entrant's initial patent grant in the host country (the United States) increases the likelihood and frequency of international knowledge flows to local U.S. firms and other patenting entities by 29.4 and 6.9 percent, respectively, as measured using forward patent citations. An initial patent grant also leads to a 29.7 percent increase in the probability that an entrant files at least one subsequent patent application within 5 years, suggesting the significant role that an initial grant can have in a firm's sustained technological presence in the host country. Overall, initial intellectual property rights appear to mitigate impediments to cross-border knowledge flows and the benefits of this outweigh frictions arising from the exclusionary nature of the patents.
Abstract: We construct a new global dataset on common language. The data cover 242 countries and territories and are based on information about the speakers of 6,675 languages. Using data from Ethnologue, we provide 11 bilateral measures reflecting different dimensions of linguistic connections within and between countries, including common official languages, common native and acquired languages, and linguistic proximity across different languages. A key novelty of the dataset is that it includes consistently defined information on linguistic relationships not only between different countries but within the administrative borders of countries as well.
Dataset repository: https://doi.org/10.7910/DVN/8WGJTL
