Innocent Bystanders : How Foreign Uncertainty Shocks Harm Exporters

Taglioni, Daria ; Zavacka, Veronika

World Bank, Washington, DC

关键词: ACCOUNTING;    ADJUSTMENT COST;    ADJUSTMENT COSTS;    ADJUSTMENT MECHANISM;    ADVANCED COUNTRIES;   

DOI  :  10.1596/1813-9450-6226
RP-ID  :  WPS6226

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The failure of trade economists toanticipate the extreme drop in trade post Lehman Brothersbankruptcy suggests that the behavior of trade inexceptional circumstances may still be poorly understood.This paper explores whether uncertainty shocks haveexplanatory power for movements in trade. VAR estimations onUnited States data suggest that domestic uncertainty is astrong predictor of movements in imports, but has littleeffect on exports. Guided by these results, the paperestimates a bilateral model with focus on the impact ofimporter uncertaintyon foreign suppliers. It finds thatthere is a strong negative relationship between uncertaintyand trade and that this relationship is non-linear.Uncertainty matters most when its levels are exceptionallyhigh. The paper does not find evidence of learning from pastturmoils, suggesting that prior experience with majoruncertainty shocks does not reduce the effect on trade. Inline with the expectations, the negative effect ofuncertainty shocks on trade is higher for traderelationships more intensive in durable goods. Surprisingly,however, the effect of durability is non-linear. Supplychain considerations or the possibility that therelationships with the highest durability lead to importantcompositional effects may have a bearing on the results. Theresults are robust to excluding the post Lehman shock,suggesting that the trade response during the 2008-2009crisis has been similar topast uncertainty events.