Local Content Requirements Versus Tariff Equivalents: How We Measure Matters

Flaig, Dorothee; Stone, Susan

doi:10.1111/twec.12426

Cited by 5 publications

(5 citation statements)

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“…The results articulate that there has been a significant difference in the level of GVC backward participation in ASEAN economies between the early adopters and the latecomers. Apart from the discussion on trade in value-added by measuring the domestic- and foreign-added content, the criticality of local content requirement (LCR) in trade has also been highlighted in the study by Flaig and Stone (2017). The study has quantitatively validated that LCR can be a barrier to trade.…”

Section: Resultsmentioning

confidence: 99%

“…Quantitative analysis using computable general equilibrium (CGE) model shows that LCR can affect trade. Even if the domestic suppliers increase the share, it can lead to an increased domestic price which ultimately leads to an increase in input price and fall in exports (Flaig and Stone, 2017). By constructing GVC bargaining power index Li et al (2022) measured the GVC division position by using bilateral stochastic frontier analysis model.…”

Section: Discussionmentioning

confidence: 99%

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Toward a future discourse on global value chains

Pushp,

Ahmed

2024

CPOIB

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Purpose The discourse on global value chains (GVC) is undergoing a transformation in terms of its conceptualisation, theorisation and pragmatic applications. Today, the production systems have become more complex as global economic order continues to witness marked geo-economic manoeuvring. Thus, the direction of discourse on GVC ought to move from mere theoretical propositions toward becoming more evidence based. There have been recent studies that have used the governance and upgrading propositions by Gary Gereffi and others to seek quantitative evidence. This study aims to decipher the quantitative discourse on GVC and to set the emerging and future research agenda. Design/methodology/approach Through a systematic literature review, the authors first analyse the quantitative studies on GVC carried out during the last two decades. The authors then outline a future research agenda and examine a few relevant modelling techniques that could potentially be used to solicit newer evidence in GVC research. Findings The authors categorise the quantitative discourse on GVC into three crucial themes, namely, GVC framework, GVC participation and position, environmental aspects and regionalisation in GVC. The most commonly used quantitative techniques are gravity model, panel data estimation, structural decomposition analysis and computable general equilibrium modelling. Originality/value This paper contributes to the GVC discourse in two ways. Firstly, the authors argue that the theoretical frameworks within the GVC discourse should be complemented by evidence-based quantitative studies. Secondly, the authors suggest potential modelling techniques that can be used on the emerging and future research agenda.

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Section: Resultsmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

Toward a future discourse on global value chains

Pushp,

Ahmed

2024

CPOIB

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“…Studies aimed to measure the impact of LCR policy for the host economy usually employ an Input-Output (I-O) modeling framework, use Social Accounting Matrix (SAM) models [22] or the Competitive General Equilibrium (CGE) models [23]. But given the lack of regional I-O tables in Russia, this paper attempts to offer a specific approach based on a statistical simulation model.…”

Section: Methodsmentioning

confidence: 99%

Managing Regional Economic Development Through Local Content Requirements in Oil and Gas Industry

Semykina¹

2017

EoR

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This paper explores the regional economic impact of mineral resource endowment and offers specific inputs to the debate on the local content requirement (LCR) policy, gaining urgency in modern economic and political environment. The paper considers the intricacies related to greenfield investment projects in Russian oil and gas industry. Focusing on the experience of the Krasnoyarsk region, the paper examines the way national companies operate in the newly developing oil and gas provinces of Russia. The analysis of key economic indices shows that the existing approach does not allow having significant benefits from resource endowment in the region. The main idea is that the establishment of completely new industry has to affect regional economic development, budget revenues dynamics and employment to influence the related industries and services in the region. The conducted analysis let to form possible scenarios and evaluate the dynamics of regional economic development depending on the scale of LCR policy. The developed approach based on statistical modeling allows assessing both direct and indirect effects of LCR policy. The obtained results allow to conclude that the implementation of LCR policy leads to the growth of real income per capita and the job creation in the region. The development of equipment and services suppliers for oil and gas industry by ripple effects can boost socioeconomic development and diversify regional economy. The paper also dwells on some pitfalls and risks accompanying LCR policy and considers crucial points of introducing this kind of policy for local and federal government.

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“…Fugazza and Maur (2008) noted serious analytical mistakes from loose specifications of NTMs in CGE modelling. Thus, the choice of modelling approach 41 strongly affects outcomes in terms of size, direction of welfare effects and allocation, even when using the same underlying data (Fugazza and Maur, 2008, Walmsley and Minor, 2016, Flaig and Stone, 2017. For example, the use of ad-valorem tariff equivalents might wrongly create government revenue while efficiency approaches yield positive effects by design (especially when implemented in anon-discriminatory way) and are criticized for strong effects on GDP.…”

Section: Studies-united States International Trade Commission (Itc-gr...mentioning

confidence: 99%

Modelling trade and other economic interactions between countries in baseline projections

Bekkers¹,

Antimiani²,

Carrico³

et al. 2020

JGEA

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This paper examines the way trade and other economic interactions between countries are modelled in the construction of baseline projections with recursive dynamic computable general equilibrium (CGE) models. Simulations are conducted on the size of trade elasticities, the way the trade balance is modelled (macroeconomic closure), trade growth, and energy prices. Other topics scrutinized are the modelling of zeros, modelling of new technologies and new types of trade policies (trade in data and digitalization), phasing in of future trade policies, and migration and remittances. We

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Local Content Requirements Versus Tariff Equivalents: How We Measure Matters

Cited by 5 publications

References 10 publications

Toward a future discourse on global value chains

Toward a future discourse on global value chains

Managing Regional Economic Development Through Local Content Requirements in Oil and Gas Industry

Modelling trade and other economic interactions between countries in baseline projections

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