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Product Standards, Exports and Employment: An Analytical Study

13 Jun 2005-
Abstract: Through the process of globalization, trade dependence and interdependence of the developing countries have increased phenomenally than ever before. The characteristic of this late twentieth-century globalization process has been the new technological revolution that has led to a high rate of world exports of electronics and other high-technology products. This has marginalized most of the developing countries exporting largely the low quality and low value-addition manufacturing and primary products, barring a few exceptions like China, India and Mexico. The fruits of globalization have, therefore, been unevenly distributed so far across the developed and the developing countries. Moreover, whatever little growth in exports of medium technology products has been achieved by a few of them, is largely driven by outsourcing of low value-addition and lower-stage of activities by the foreign multinationals. Outsourcing of software services, rather than development of software packages, in India and assembly line for automobiles in Mexico are the two glaring examples. These activities may have boosted the total exports of these countries, but they have failed to generate any feedback effect on the rest of the economy in terms of skill formation, increase in overall productivity level and product diversification. The possibility of achieving significant export growth by the developing countries has further been constrained by the quality regulations and environmental standards that are often in place on the imports by the advanced industrialized countries. These non-tariff barriers, the new face of protectionism in the twenty-first century, has forced the developing countries to alter their production structures and technology with far reaching implications for income distribution and employment opportunities. These developments reveal a paradox of export-led growth and poverty reduction. To generate strong linkages and dynamic effects with rest of the economy, and to meet the challenges posed by the new set of regulations and standards, the developing countries must enhance their product quality and specialize in high value-addtion activities. But this raises the demand for capital, both human and physical, and displaces unskilled labour in the process. As a consequence, not only income inequality may be on the rise, as has already been observed in many parts of the developing world, but increased unemployment among the large number of unskilled workers is also on the card. All these contribute to weaken the positive impact of export growth on poverty alleviation. This book makes an analytical study of these issues. With the new technological revolution in the West and new set of non-tariff barriers forthcoming on the exports of the developing countries, the export-led development strategy has now quite a different set of requirements and implications than it had ever before. It now requires a good understanding of why developing countries are historically the producers of low-quality and dirty goods and the policy implications thereof. At the same time it is to be understood to what extent changes in the production structures brought about by the quality regulations and environmental standards displace unskilled workers who have almost no alternative employment opportunities. These are the tasks that have been set out in this book.
Citations
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Posted Content
TL;DR: A schematic overview of mainstreaming the environment in sustainable enterprises can be found in this article, where the authors present a framework for enterprise development in sectors contributing to a low-carbon economy.
Abstract: Contents 1 A schematic overview of mainstreaming the environment in sustainable enterprises 2 Responsible stewardship of the environment 3 Policy and regulatory frameworks favouring enterprise development in sectors contributing to a low-carbon economy 4 Industrial ecology to minimize environmental impact and maximize employment opportunities 5 Greening small and medium-sized enterprises: Business associations, large companies and the value chain approach 6 Green technology and green technology transfer 7 Occupational safety and health (OSH) and greening the workplace 8 Developing skills for greener enterprises

17 citations

Journal ArticleDOI
Abstract: This paper shows that regardless of any intra-country income differences, parallel imports result in a lower level of health-care innovation but, contrary to popular as well as conventional theoretical wisdom, a lower price in the Third World compared to market-based discrimination. Despite such a lower price, however, parallel imports unambiguously make all buyers in the Third World worse off when intra-country income disparity exists. On the other hand, even discarding the MNC's profit, there will be cases in which the richer country prefers price discrimination as well. That is, in those cases, no countries will have any incentive under the welfare criterion to undo price discrimination, contrary to Richardson (2002).

10 citations


Cites background or methods or result from "Product Standards, Exports and Empl..."

  • ...See Acharyya and GarciaAlonso (2006) for a discussion on how such a cash transfer programme, even under parallel imports, can induce innovation of drugs....

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  • ...But as demonstrated by Wauthy (1996) and Acharyya (1998), the extent of market coverage should be an equilibrium outcome of the profit-maximizing behaviour of firm(s) rather than an ex ante restriction....

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  • ...But as Wauthy (1996) and Acharyya (1998) have demonstrated, the extent of market coverage should be an outcome of profit-maximizing behaviour of the firm(s) rather than an ex ante restriction....

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  • ...This result is similar to the one derived in Acharyya and Garcia-Alonso (2006)....

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  • ...For a more elaborate discussion on this see Acharyya (2005). 9 Simply note that by Proposition 1,   ....

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Journal ArticleDOI
TL;DR: In this paper, the effects of quality standards imposed by developed countries on agricultural exports in Cameroon were assessed by applying the Poisson pseudo-maximum likelihood estimator to a gravity model on a panel made up of developed countries importing agricultural products from Cameroon.
Abstract: The aim of this paper is to assess the effects of quality standards imposed by developed countries on agricultural exports in Cameroon. Based on the quantification technique of Bora and et al. [1], we have constructed an indicator capturing the quality standards imposed by the developed country partners of Cameroon. The empirical analysis is done by applying the Poisson Pseudo-Maximum Likelihood (PPML) estimator to a gravity model on a panel made up of developed countries importing agricultural products from Cameroon. The results show that, over a study period of 2001-2018, compliance with the quality standards imposed by developed countries is restrictive and has a negative impact on agricultural exports in Cameroon. Thus, a 10% strengthening of quality standards results in a decrease of about 2.83% in the volume of agricultural exports to Cameroon. Given the very demanding nature of quality standards, their compliance can enable the Cameroonian agricultural export sector to become more competitive on the international market. We recommend training and support for producers in order to give them the opportunity to comply with the standards.

5 citations

Journal ArticleDOI
TL;DR: In this paper, the authors examine private and social incentives for quality innovation in a market for a quality-differentiated good with heterogeneous set of consumers and a local firm facing competitive imports from abroad.

5 citations

Posted Content
TL;DR: In this article, a non-cooperative bargaining problem with one buyer and many sellers is studied, focusing on the tension between the complementarity intrinsic to such a setup and efficiency.
Abstract: This paper studies a non-cooperative bargaining problem with one buyer and many sellers, focussing on the tension between the complementarity intrinsic to such a setup and efficiency. We address this problem in a very general setup with a technology that allows for variable degrees of complementarity, a bargaining protocol that is symmetric and allows for both secret, as well as publicly observable offers, and strategies that allow for history dependence. We examine equilibria for all parameter values. Interestingly, and in contrast to most of the literature, we demonstrate that there is a large class of parameter values such that an asymptotically efficient equilibrium with a positive buyer payoff exists - thus demonstrating that strategic holdout is not a serious obstacle to the working of the Coase theorem. For robustness we examine alternative contractual forms, i.e. conditional and equity contracts, as well as variations that allow for multiple project implementation and asymmetric sellers.

4 citations


Additional excerpts

  • ...Thus, from (1), these preferences satisfy the following properties: u(α∗, q) > u(α, q) > 0, and uq(α ∗, q) > uq(α, q) > 0, ∀q > 0....

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References
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Posted Content
TL;DR: In this article, the authors studied the impact of competitive import licenses on the economy and the relationship between welfare cost of quantitative restrictions and tariff equivalents, and showed that the effect of wage legislation on equilibrium levels of unemployment.
Abstract: Studies the impact of competitive import licenses on the economy. Value of rents associated with import licenses; Relationship between welfare cost of quantitative restrictions and tariff equivalents; Impact of wage legislation on equilibrium levels of unemployment. (Из Ebsco)

4,933 citations

Journal ArticleDOI
TL;DR: In this article, directly unproductive, profit-seeking (DUP) activities are defined as a general concept that embraces a wide range of recently analyzed economic activities, including the subset of rent-seeking activities considered by Krueger.
Abstract: This paper propses directly unproductive, profit-seeking (DUP) activities as a general concept that embraces a wide range of recently analyzed economic activities, including the subset of rent-seeking activities considered by Krueger. It then proceeds to provide a synthesis and generalization of the welfare-theoretic analysis of such activities by developing a fourfold categorization of cases depending on the levels of distortions before and after the DUP activity. Thus a unification and overview of the subject are achieved.

1,215 citations

Posted Content
TL;DR: A number of recent studies appear to show that international trade is a secondary factor in the growing inequality of wages, with technology probably the main culprit as mentioned in this paper, but these studies have been subjected to severe and in some cases harshly worded criticism by trade theorists, who argue that the authors of these studies misspecified the impacts of both technology and trade on factor prices.
Abstract: A number of recent studies appear to show that international trade is a secondary factor in the growing inequality of wages, with technology probably the main culprit. These studies have, however, been subjected to severe and in some cases harshly worded criticism by trade theorists, who argue that the authors of these studies have misspecified the impacts of both technology and trade on factor prices. This paper shows that it is the critics who are confused. In particular, much recent discussion about technology, trade, and wages is marked by a failure to distinguish between the models we all use and the particular thought experiments we typically use to teach these models -- which happen not to be the appropriate thought experiments we need to analyze the real-world issues.

476 citations

Journal ArticleDOI
TL;DR: The authors argue that technological catch-up causes production of the least skill-intensive Northern goods to migrate south (where they become the most skillintensive Southern goods), which raises wage inequality in both the South and the North.

316 citations

Book
01 Jan 1996
TL;DR: This article showed that countries which are labor abundant in a global sense may see wages decline with liberalization if they are capital abundant in the local sense, which implies that virtually all assertions regarding anticipated distributional consequences of trade liberalization are without foundation.
Abstract: Empirical work relating trade liberalization and income distributed has iden- tified an important anomaly. The Stolper-Samuelson theorem predict trade liberalization will shift income toward a country's abundant factor. For developing countries, this suggests liberalization will principally benefit the abundant unskilled labor. Yet extensive empirical studies have identified many cases with a contrary result. This paper develops a simple theoretical explanation for this anomaly. It shows that countries which are labor abundant in a global sense may see wages decline with liberalization if they are capital abundant in a local sense. The current absence of empirical work that would allow us to identify the relevant local abundance implies that virtually all assertions regarding anticipated distributional consequences of trade liberalization are without foundation. There may likewise be important implications for industrialized countries that border developing countries undertaking trade liberalization, particularly in regard to the incentives for migration.

197 citations

Trending Questions (2)
How does high standards Employment requirement affect people?

The paper does not provide a direct answer to the query. The word "employment" is mentioned in the paper, but it is not specifically discussed in relation to high standards requirements. The paper primarily focuses on the impact of quality regulations and environmental standards on developing countries' exports and employment opportunities.

What are the impact of High Standards Qualifications to tremendous rate of employment?

High standards qualifications can lead to increased unemployment among unskilled workers, weakening the positive impact of export growth on poverty alleviation.