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Yener Kandogan, Ph. D.
Associate Professor of Business Economics
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Working Papers
Is
Immigration Necessary and Sufficient? The Swiss Case on the Role of
Immigrants on International Trade
ABSTRACT
Under review
Trade Creation and Diversion Effects of Europe's
Regional Liberalization Agreements
ABSTRACT
Under review
A Gravity Model for Components of Imports
ABSTRACT
Under review
Regional and Global Production Integration Trends
in OECD Countries
ABSTRACT
Published Research
Regionalism versus Multilateralism: Evidence
for the Natural Trade Partners Theory from the Euro-Mediterranean Region
ABSTRACT
Journal of Economic Integration 2008,
forthcoming
Falling Walls and
Lifting Curtains: Analysis of Border Effects in Transition Countries
Journal of International Trade and Economic
Development, 2008, Forthcoming
Consistent Estimates
of Regional Blocs' Trade Effect
Review of
International Economics, 2008, Forthcoming
Sensitivity of
International Blocs' Trade Effect to Alternative Specifications of the
Gravity Equation
Journal of Applied Economics, 2007, Forthcoming
Ethics in Practice:
What are Managers Really Doing?
Journal of Business Ethics, 2007, 70
The Reorientation of Transition Countries' Exports:
Changes in Quantity, Quality, and Variety
ABSTRACT
Review of European Economic Policy 2006, 41(4)
Does Product Differentiation Explain the Increase in Exports
of Transition Countries
ABSTRACT
Eastern European Economics 2006,
44(2)
How much Restructuring did the Transition Countries
Experience? Evidence from Quality of their Exports
ABSTRACT
Comparative Economic Studies
2005, 47(3)
Power Analysis of the Nice Treaty on the Future
of European Integration
ABSTRACT
Applied Economics
2005, 37
Technological Progress Through Trade Liberalization
in Transition Countries
ABSTRACT
Journal
of Economic Integration 2004,
19(4)
On Types of Trade, Adjustment of
Labor, and Welfare Gains During Asymmetric Liberalizations
ABSTRACT
Emerging Markets
Finance and Trade 2004, 40(2)
Intra-industry Trade of
Transition Countries: Trends and Determinants
ABSTRACT
Emerging Markets Review
2003, 4(3)
Reconsidering the Adjustment Costs
of the Europe Agreements
ABSTRACT
Applied Economics Letters,
February 2003, 10(2)
Some Challenges in the East West
Integration of Europe
ABSTRACT
University of Michigan, Ph.D. Thesis,
May 1, 2001
Political Economy of the Eastern
Enlargement of the European Union: Budgetary Costs and Reforms in Voting
Rules
ABSTRACT
European Journal of Political
Economy, November 2000, 16(4)
Lingering Effects of Central
Planning on Current Trade of CIS countries
ABSTRACT
Weltwirtschaftliches Archiv,
Review of World Economics, September 1999, 135(3)
Is Immigration Necessary and Sufficient? The Swiss Case
on the Role of Immigrants on International Trade
Under review
The paper
finds varying
immigration effects with the type and size of immigrants, as well as their
duration of stay and type of products traded, finding overall support for
the preference, the information and the enforcement hypotheses. More
importantly, this paper introduces the role of cultural proximity into the
ethnic networks literature, and suggests that immigration is neither
necessary nor sufficient to bridge the cultures of two countries and
experience its trade-stimulating effect. It finds that the immigration
effect on trade is not as necessary if the home and host countries are
already familiar with each other’s culture. It also shows that immigration
alone is not sufficient, and introduces the level of communication as a
catalyst in the process. A proxy used to measure the level of communication
turns out to be an important factor, and reduces the role other factors play
on the magnitude of the immigrant effect.
Evidence for the Natural Trade Partners Theory from the
Euro-Mediterranean Region
Under review
The paper develops a modified triple-indexed gravity model
to measure the trade creation and diversion effects of the preferential
trade agreements in the Euro-Mediterranean region. The model is applied to
different components of imports, since the welfare implications of each
component is expected to be different. Using these measures, the paper
proceeds to look for evidence for the Natural Trade Partners Theory using
three definitions of natural partners. Results show that there is support
for the theory when geographical distance or initial trade volumes are used
to define naturalness only for intra-industry components. Stronger support
is found when complementarity is used to identify natural partners.
Trade Creation and Diversion
Effects of Europe's Regional Liberalization Agreements
Under review
After a short background on recent
developments in gravity modelling and liberalization agreements in Europe,
this paper measures the trade creation and diversion effects of major
European agreements based on the results of a correctly specified
triple-indexed gravity model with bilateral fixed effects. For each
agreement and partner country, welfare implications are discussed in sectors
of different factor intensities with emphasis on the role of similarity in
income or relative factor endowments between partners, as well as the date
and the reciprocity of the agreement. This is followed by a description of
the characteristics of the non-partner countries that are affected by these
agreements in each sector.
A Gravity Model for Components
of Imports
Under review
This paper develops a
gravity model to explain different components of imports, and compares it to
the models of total trade and imports from the literature. It is shown that
not only the standard variables in gravity models but also specific
variables from competing trade theories play different roles for different
components of imports. In particular, it is found that as economic sizes or
relative factor endowments become similar, the volume of intra-industry
imports, especially that of its horizontal component increases. Hence, this
model removes a widespread but unnecessary restriction in the gravity
models. An extension of the model shows that colonial relations are
important determinants of inter-industry imports. In contrast, cultural
proximity based on religion and language plays more a crucial role in
determining horizontal intra-industry imports.
The Role of International Blocs on Trade: A
Comparison across Gravity Models
Under review
This paper evaluates the
additions and adjustments proposed to the standard gravity model, and
compares each gravity model’s findings on the role of international blocs.
The results suggest that all additions proposed improve the overall fit.
Removing restrictions on the parameters of the model with the introduction
of fixed effects for different years, exporters, importers, and partners is
important to correctly specify the model and analyze the role of blocs on
trade. An analysis of the models with fixed effects for this purpose show
that trade increases with intensity of integration.
The Reorientation of Transition
Countries' Exports: Changes in Quantity, Quality, and Variety
Review of European Economic Policy
The paper analyzes the
factors behind the reorientation of transition countries’ exports to their
non-traditional partners outside their former block. First, the amount of
reorientation is calculated using a gravity model. Then, reasons for the
cross-country differences in the rate of closing the gap between the actual
and potential exports, such as increases in quantity, quality, and variety,
are analyzed using a variety of measures from the literature. The results
show that although exports have increased significantly, as of 1999 they are
still far below the potential in CIS and to a lesser extent in CEEC. Change
in quantity has been the primary reason behind the reorientation of CIS
exports. However, it had smaller effect on CEEC reorientation, where
increase in product variety has been important. Although some quality
improvement is observed in both CEEC and CIS, it had small effect on the
extent of reorientation.
Does Product Differentiation
Explain the Increase in Exports of Transition Countries
Eastern European Economics 2005, forthcoming
The paper analyzes the
increase in transition countries’ exports to their non-traditional trade
partners. It uses four different measures of product differentiation to find
out the extent that the increase in product variety explains this
phenomenon. It is found that opening up to new trade partners first
increases the number of sectors in which trade occurs. This is followed by a
brief period of specialization in some select sectors, and finally an
increase in the number of varieties of products in these sectors. Lastly,
the increase in product variety in CEEC has been much more substantial than
in CIS.
How much Restructuring did the
Transition Countries Experience? Evidence from Quality of their Exports
Comparative Economic Studies 2005, 47(3)
The
increase in trade with market economies is a good sign, but it is not
conclusive about the extent of restructuring experienced in transition
countries. This paper explores the source of the increase in trade with an
analysis of their exports’ quality. Changes in factor intensity and unit
values are observed. The exports of both CEEC and CIS countries in different
sectors are analyzed during 1992-1999, which allows examination of the
effects of trade liberalizing agreements on restructuring. I find that
although CEEC are in a significantly better position than CIS due to Europe
Agreements, there is still large number of export products with structural
problems in CEEC. Insufficient FDI, OPT clause in Europe Agreements, not
well exploited human capital are suggested as possible causes.
Intra-industry trade of Transition Countries:
Trends and Determinants
Emerging Markets Review 2003, 4(3)
This paper analyzes trends in different
components of trade of transition countries in Eastern Europe and former
Soviet Union with their major partners. To explain the cross-country
differences, the paper points out the important distinction between
inter-industry trade and intra-industry trade (IIT), and horizontal and
vertical IIT in terms of their determinants. Using varieties of gravity
models, it is shown that variables from Increasing Returns Trade Theory,
such as scale economies, similarity of income levels, and number of
varieties produced play important roles in IIT, especially in horizontal IIT,
whereas factors such as comparative advantage, dissimilarity in income
levels, and more developed trade partners of Neoclassical Heckscher-Ohlin
Trade Theory are crucial in determining inter-industry trade as well as
vertical IIT to a lesser degree.
Technological Progress
Through Trade Liberalization in Transition Countries
Journal of Economic Integration 2004
This paper sees trade liberalization as a means of
increasing competitive pressures on firms, thus creating incentives for
reducing costs of production through technological progress. Through this
channel, liberalization is expected to help backward countries narrow the
technological gap with advanced countries. The case of transition countries
is analyzed empirically by looking at the trends in unit values of their
exports in technology-intensive sectors. I find that liberalization have
indeed increased the technological progress rate in transition countries,
but some cross-country differences are also observed in their responses to
liberalization. A simple theoretical model of oligopolistic firms' strategic
decision on R&D is developed to motivate further empirical analysis and thus
explain the cross-country differences. The model suggests that the initial
conditions, such as the size of the initial gap and the initial openness, as
well as the stage of market reforms, such as the rate of liberalization and
the market structure are important factors explaining countries' technology
response to liberalization. Models results are supported by several
regression experiments.
Power Analysis of the
Nice Treaty on the Future of the European Integration
Applied Economics 2005
This paper analyzes the effects of changes in voting weights
and rules at the Nice Intergovernmental Conference of the EU on widening and
deepening of the European integration, by applying methods that use
Shapley-Shubik and Banzhaf indices. I find significant decrease in the
voting power of small countries. Since most applicant countries are small in
size, this finding implies lower costs of enlargement, and smaller loss of
power to new members. Both make widening of integration more acceptable to
incumbent members. I also find a relative increase in conciliatory power of
small countries, and a relative increase in the independent power of major
EU countries. These make small members compromise more, and improve the
position of proponents of further deepening of integration such as France
and Germany. Lastly, fairness analysis reveals a more federalist face for
the EU; in the way votes are distributed.
Regional and Global
Production Integration Trends in OECD Countries
The paper proposes a measure of integration of production
across countries, which requires decomposing trade into its inter-industry,
vertical and horizontal intra-industry parts. Using this measure, trends in
regional and global production integration for some countries are analyzed
during 1988-95, as well as the adjustment cost implications. It is seen that
countries' preferences for regional or global production integration are
consistent with adjustment cost implications of each.
On
Types of Trade, Adjustment of Labor, and Welfare Gains During
Asymmetric Liberalizations
Emerging Markets Finance and Trade 2004, 40(2)
The liberalization policy adopted between CEEC and the EU is
country-asymmetric in the sense that the EU opens its markets to CEEC firms
faster than the CEEC. It is also industry-asymmetric because of the
sensitive sectors that are kept out of liberalization. In this paper, I
analyze the effects of these asymmetries, as well as the effects of
differences in factor abundance and population size. The standard
Heckscher-Ohlin model is taken as the starting point. I add intermediate
goods to the model in order to get vertical intra-industry trade. The model
assumes a Cobb Douglas/CES utility function, which allows consumers to
demand both imported and domestic varieties of the same good at the same
time. Thus the model also creates horizontal intra-industry trade.
Furthermore, the difference in factor abundance of countries results in
inter-industry trade as well. I acknowledge that liberalization affects each
of these types of trade differently, and argue that changes in each imply
adjustment in labor markets of different magnitudes. Consequently, I analyze
the effects of different liberalization policies on labor adjustment and
welfare gains.
Reconsidering the Adjustment Costs of the Europe
Agreements
Applied Economics Letters, February 2003, 10(2)
I argue that vertical intra-industry trade (IIT) should be
separated from horizontal IIT to have a better judgement about adjustment
costs of trade liberalization. A simple method to decompose IIT is
presented. Using this, we see that after the Europe Agreements, share of
vertical IIT has not increased much between Germany and Central and Eastern
European countries. When adjustment costs are analyzed, we see that the
resulting labor displacement has been substantial, explaining partly EU's
reluctant approach in the Europe agreements.
Some Challenges in the East West Integration of Europe
University of Michigan, Ph.D. Thesis,
May 1, 2001
The dissertation is composed of four essays motivated by
various aspects of the integration between Central and Eastern European
countries and the European Union (EU). The issues addressed include the
adjustment costs of the Europe Agreements, technology flow from West to
East, budgetary costs of eastern enlargement of the EU, and lingering
effects of central planning on international trade. The essays include a
mixture of theoretical and empirical analyses.
Political
Economy of the Eastern Enlargement of the European Union: Budgetary Costs
and Reforms in Voting Rules
European Journal of Political Economy, November
2000, 16(4)
The EU has devised budgetary reforms to limit the funds that
will flow to the East. Using a political economy model and drawing on the
experience of previous enlargements, this paper argues that such
pre-accession reforms will be ineffective because they can be reversed by a
coalition of Eastern European countries after membership. The model allows
for coalition formation and vote trading, and suggests reform in voting
rules rather than budgetary reforms to solve this problem.
Lingering
Effects of Central Planning on Current Trade of CIS countries
Weltwirtschaftliches Archiv, Review of World
Economics, September 1999, 135(3)
The paper first gives reasons for lingering effects of
central planning on the international trade of former Soviet Republics,
despite its abolishment in early 1990s. Then, it tries to measure the
lingering effects in CIS' current trade. It is shown that central planning
still affects the geographical distribution of CIS trade. However, no
significant lingering effects are observed on trade volume and commodity
composition of CIS countries' trade.
