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Essays in International Trade and Development Essays on International Trade and Development Inaugural-Dissertation zur Erlangung des Grades Doctor oeconomiae publicae (Dr. oec. publ.) an der Ludwig-Maximilians-Universität München 2015 vorgelegt von Robert Grundke Referent: Prof. Gabriel Felbermayr, Ph.D. Korreferent: Prof. Alexander Danzer, Ph.D. Promotionsabschlussberatung: 04. November 2015 Datum der mündlichen Prüfung: 23. Oktober 2015 Berichterstatter: Prof. Gabriel Felbermayr, Ph.D. Prof. Alexander Danzer, Ph.D. Prof. Davide Cantoni, Ph.D. Acknowledgements First and foremost, I want to thank my supervisors Gabriel Felbermayr and Alexander Danzer for an excellent supervision of my doctoral thesis and their encouragement of my research projects. The field research I conducted in Tajikistan as part of my doctoral thesis would not have been possible without their strong support. Second, I thank my co-authors Christoph Moser and Alexander Danzer for an excellent working relation- ship and fruitful discussions. Moreover, I am deeply grateful to my parents and my sis- ter for supporting me through the five years of my doctoral studies and giving me valu- able advice on formatting issues in the final stage of my dissertation. Furthermore, I am deeply indebted to Raquel Artecona and Fernando Flores from the United Nations Eco- nomic Commission for Latin America and the Caribbean (UN-ECLAC), who during an internship gave me the opportunity to access and work with the raw data of the U.S. import refusal database, which I use in the first chapter of my dissertation. I am also very grateful to Reinhard Woytek, Hartwig Ungethuem, Torsten Swoboda, Firuza Ganieva and Zara Makhmudova from the GIZ Office in Tajikistan for providing me with valuable advice and logistical support during the field research stay in Tajiki- stan in March and November 2014. In addition, I want to thank my language interpreter Muhammadali Nurov as well as the rural farmers and other interview partners that pro- vided me with valuable insights in the institutional structures and living realities in Ta- jikistan. I am also very grateful to the German Academic Exchange Service (DAAD), the German National Academic Foundation (Studienstiftung des deutschen Volkes), the German Research Foundation (DFG), the Münchner Universitätsgesellschaft (MUG) as well as the Faculty of Economics of the University of Munich for providing me with financial support during my doctoral studies and during the internship at the UN- ECLAC. Last but not least, I want to thank my flat mates and friends as well as my col- leagues and staff members at the Faculty of Economics of the University of Munich for the interesting and lively conversations and wonderful five years in Munich. Contents Preface 1 1 Hidden Protectionism? Evidence from Non-tariff Barriers to Trade in the United States 5 1.1 Introduction 5 1.2 Related Literature 8 1.3 Background 9 1.3.1 The U.S. Food and Drug Administration (FDA) 9 1.3.2 Descriptive Statistics on U.S. Imports and Import Refusals 12 1.4 Data and Empirical Strategy 13 1.4.1 Data 13 1.4.2 Empirical Strategy 14 1.6 Empirical Results 16 1.6.1 Baseline Results 16 1.6.2 Developing vs. Developed Countries 17 1.6.3 Is there Evidence for Protectionism? 18 1.6.4 The Costs of Non-Compliance with U.S. Product Standards 20 1.6.5 Further Results 21 1.7 Conclusions 22 Tables and Figures 24 Appendix 1 A Tables and Figures 33 Appendix 1 B Data Cleaning and Matching 48 2 Export price shocks and rural labor markets: The case of cotton in Tajikistan 55 2.1 Introduction 55 2.2 Tajikistan and the cotton sector 59 2.3 Theory 66 2.4 Empirical methodology and data 69 2.5 Results 73 2.5.1 Results I: Participation in cotton harvesting 74 2.5.2 Results II: Effects on agricultural wages 74 2.5.3 Effects on other labor market subgroups 76 2.5.4 Analysis of political connections on large parastatal farms 78 2.5.5 Robustness checks 78 2.6 Conclusion 81 Tables and Figures 83 Appendix 2 A Tables and Figures 101 Appendix 2 B List of datasets 122 Appendix 2 C Theoretical Model 125 Appendix 2 D Interviews in Tajikistan 135 Appendix 2 E Data Cleaning and Matching 191 3 Transitory income shocks and household behavior: impacts of a cotton export price surge on rural households in Tajikistan 201 3.1 Introduction 201 3.2 Tajikistan and the cotton sector 205 3.3 Data and empirical strategy 208 3.3.1 Data 208 3.3.2 Empirical strategy 209 3.4 Results 213 3.4.1 Income 213 3.4.2 Consumption of food, durable goods and services 215 3.4.3 Migration 217 3.4.4 Education and health 218 3.4.5 Entrepreneurial activity 220 3.4.6 Labor supply 220 3.5 Conclusion 222 Tables and Figures 226 Appendix 3 A Tables and Figures 240 Appendix 3 B Data Cleaning and Matching 256 References 261 List of Figures Figure 1.1.: U.S. Unemployment Rate and Hidden Protectionism? 30 Figure 1.2.: Total U.S. Imports and Refusals of FDA Regulated Products 30 Figure 1.3.: U.S. Imports and Refusals for OECD Countries 31 Figure 1.4.: U.S. Imports and Refusals for non-OECD Countries 31 Figure 1.5.: FDA-budget for Field Activities, FDA-officers in the Field and FDA-inspections with Product Sample Analysis 32 Appendix Figure A 1.6.: U.S. Imports by FDA Product-groups (as % Total Imports) 41 Appendix Figure A 1.7.: U.S. Import Refusals by FDA Product-group (as % Total Refusals) 41 Figure 2.1.: Regional variation of cotton production in Central Asia and Tajikistan 83 Figure 2.2.: Cotton world market price (100=2000) 83 Figure 2.3.: Labor market equilibriums for small private and big para-statal farms 84 Figure 2.4.: Regional variation of cotton production in Tajikistan (cotton/non-cotton communities in the TLSS 2007) 84 Figure 2.5.: Indicators for political influence on farming decisions (GIZ Political Leader Survey 2011) 85 Appendix Figure A 2.6.: Cotton production and land area harvested (100=2000) 101 Appendix Figure A 2.7.: Wheat world market price (100=2001) 101 Appendix Figure A 2.8.: Wheat production and land area harvested (100=2000) 102 Appendix Figure A 2.9.: Share of cultivated area under dehkan farms per province 102 Appendix Figure A 2.10.: Share of cultivated area under state owned enterprises per province 102 Appendix Figure A 2.11.: Share of cultivated area under household plots per province 103 Appendix Figure A 2.12.: Number of newly issued SCLG land use certificates per province (2007=100)103 Appendix Figure A 2.13.: Share of small farm workers (out of all agricultural workers) by province 103 Appendix Figure A 2.14.: Histogram for the share of small farm workers (out of all agricultural workers) per PSU (for all cotton PSUs in 2007); TLSS 2007 104 Appendix Figure A 2.15.: Area cropped with cotton on state owned enterprises per province (in ha) 104 Appendix Figure A 2.16.: Area cropped with cotton on dehkan farms per province (in ha) 105 Appendix Figure A 2.17.: Cotton production on state owned enterprises per province (in tons) 105 Appendix Figure A 2.18.: Cotton production on dehkan farms per province (in tons) 105 Appendix Figure A 2.19.: Share of area cropped with cotton on state owned enterprises (out of total area under cotton) per province 106 Appendix Figure A 2.20.: Share of cotton production on state owned enterprises (out of total cotton production) per province 106 Appendix Figure A 2.21.: Area cropped with cotton on big farms (>20 ha) per province (2007=100) 107 Appendix Figure A 2.22.: Area cropped with cotton on small farms (<20 ha) per province (2007=100) 107 Figure 3.1.: Regional variation of cotton production in Tajikistan (cotton/non-cotton communities in the TLSS 2007) 226 Appendix Figure 3.2.: Cotton world market price (100=2000) 240 Appendix Figure 3.3.: Cotton production and land area harvested (100=2000) 240 Appendix Figure 3.4.: Wheat world market price (100=2001) 241 Appendix Figure 3.5.: Wheat production and land area harvested (100=2000) 241 List of Tables Table 1.1.: U.S. Imports and Refusals Dummy – Different Estimators 24 Table 1.2.: U.S. Imports and Refusals – Different Estimators 24 Table 1.3.: U.S. Imports and Refusals – Food vs. Non-Food Products 25 Table 1.4.: U.S. Imports and Refusals – Type of Refusal 26 Table 1.5.: U.S. Imports and Refusals – Type of Inspection 27 Table 1.6.: U.S. Refusals and the Subrime Crisis – A First View 28 Table 1.7.: U.S. Imports and Refusals – Evidence for Hidden Protectionism? 29 Appendix Table A 1.8.: Number of U.S. Import Refusals per Matched Product-group 2002 – 2012 (Top Ten out of 93 Product-groups) 33 Appendix Table A 1.9.: Reasons of U.S. Import Refusals (Top Ten Reasons from 2002 - 2011) 33 Appendix Table A 1.10.: Share of FDA Regulated Products in Total Exports to the U.S. for OECD Countries (Year 2012) 34 Appendix Table A 1.11.: Share of FDA Regulated Products in Total Exports to the U.S. for non-OECD Countries (Year 2012, Top 10 by Region) 35 Appendix Table A 1.12: U.S. Imports and Refusals – Different Estimators, Non-OECD Countries 36 Appendix Table A 1.13.: U.S. Imports and Refusals – Further Fixed Effects 37 Appendix Table A 1.14.: U.S. Imports and Refusals – Further Fixed Effects, Non-OECD Countries 38 Appendix Table A 1.15.: U.S.
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