Deep trade integration and North-South participation in GVCs 

2022. Transnational Corporations, 29(3), pp. 1 - 40.  

DOI https://doi.org/10.18356/2076099x-29-3-1. Publisher site 

Do comprehensive trade agreements increase the participation of States in global value chains (GVCs) and contribute to their development? Although there is extensive evidence in the trade literature that deep preferential trade agreements (PTAs) can increase States’ bilateral export of final goods and, by implication, contribute to local development, much less is known about the characteristics of this effect on GVC relations. This paper answers the question in the framework of a gravity model and uses a comprehensive dyadic data set on trade in GVCs, PTAs, export and other characteristics for 188 countries and economies between 1990 and 2018. Results provide robust evidence that deep PTAs increase members’ bilateral trade in GVCs over the long term, especially when these agreements involve at least one developing country or economy and include provisions that support investment. These results underscore that GVC-facilitating deep PTAs are a powerful policy tool that can mobilize the potential of production and trade in GVCs for development. 

The effect of deep preferential trade agreements (PTAs) on supply chain resilience: firm-level evidence

In the face of multi-region shocks, do trade agreements increase firms’ supply chain resilience (SCR) for firms? Focusing on the COVID-19 pandemic, this paper investigates how national-level commitment to preferential trade agreements (PTAs) influences firm-level SCR, i.e., firms’ ability to restore their operation and participation in global value chains (GVCs) after a sudden disruption. I contend that trade institutions, in general, and more comprehensive PTAs, in particular, are important to reduce SC volatility in uncertain times. For this reason, their presence has a significant effect on firms’ ability to maintain their supply chain linkages when uncertainty increases. To test this argument, I use quarterly firm-level data from the World Bank Enterprise Surveys (WBES) carried out during COVID-19, the data on the design of trade agreements, and states’ pandemic containment measures in 22 developed and developing countries in 2020 and 2021. The findings show that national-level commitment to comprehensive PTAs fosters greater certainty and continuity in supply chain relationships between firms. As a result, firms in countries committed to deep PTAs demonstrated greater resilience, characterized by a quicker restoration of operations and reduced export declines in response to stringent containment measures. This paper contributes to the discussion of SCR and the design of trade institutions amid uncertainty.

Is “being foreign” a liability for mining companies? Locational liabilities and social conflict in Latin America 

(with Paul Alexander Haslam and Nasser Ary Tanimoune, University of Ottawa)

2019. Resources Policy, 63(101425), pp. 1-10.

DOI https://doi.org/10.1016/j.resourpol.2019.101425   Publisher site 

Do foreign mining firms face additional challenges and incur additional costs in host environments because of their nationality? This paper draws on the business literature on liability of foreignness (LOF), to examine whether foreign mining firms face a performance liability in comparison to locally-owned mining companies. In order to adapt this literature to the particular context of mining in developing countries, characterized by territorially-uneven costs of doing business abroad, and link it with stakeholder perceptions, we introduce the concept of “locational liabilities”. We show that foreign mining firms do experience a liability of foreignness associated with a higher likelihood of social conflict, than locally-owned firms, and that this effect can only be fully identified with the inclusion of locational liabilities that interact differentially with foreign and local firms. Furthermore, we demonstrate that these liabilities are not easily mitigated by corporate social responsibility practices, suggesting that foreign firms may have greater difficulty obtaining social license to operate. The article uses an original database of 634 mining properties in five countries of Latin America, and a novel empirical methodology based on highly-localized property-level sources of data drawn in part from geographic information system (GIS) analysis. 

Deep preferential trade agreements (PTAs), domestic institutions, and GVC participation: firm-level evidence

There is considerable evidence that trade liberalization has uneven distributional consequences for firms. It is also well-established that institutions can significantly affect  trade and economic development. What has received less attention is the interplay between these two at the firm level and in the context of the globalization of supply chains. I measure GVC participation at the micro- (firms) level and combine it with measures of the deepening of preferential trade integration and the quality of domestic institutions at the macro- (country) level for 124 countries between 2006 and 2020. Leveraging the differential effect of trade integration on firms with different levels of productivity across different institutional environments, I find that deep trade integration helps productive firms participate more in GVCs when the quality of domestic institutions is good.

Do Canadian mining firms behave worse than other companies? Quantitative evidence from Latin America 

(with Paul Alexander Haslam and Nasser Ary Tanimoune, University of Ottawa)

2018. Canadian Journal of Political Science/Revue canadienne de science politique, 51(3), pp. 521-551.

DOI https://doi.org/10.1017/S0008423918000185  Publisher site 

The effects of Canadian mining companies on local communities abroad is an increasingly contentious topic as activists and academics, citing case studies, have drawn attention to alleged problems.  Despite the policy relevance of this issue, there have been no generalizable analyses of whether mining companies headquartered in Canada behave differently from mining firms headquartered in other countries.  This paper conducts the first rigorous statistical analysis of the effect of country-of-origin, or more specifically, “being Canadian” on the occurrence of known social conflicts in Latin America.  We use an original database of 634 mining properties in five Latin American countries, which allows us to differentiate between a country-of-origin effect, and other probable determinants of social conflict in communities near mining properties.  We find that Canadian mining firms perform slightly better than other foreign firms, but worse than locally-owned firms. 

What explains the uneven participation of regions in global value chains (GVCs)?

Participation in GVCs offers significant opportunities for regional economic development, particularly in developing countries. Over the past two decades, production has shifted from the global North to the South, enabling these nations to specialize and upgrade industrially without building entire sectors. However, the benefits of GVC participation are unevenly distributed. While some countries have thrived, many others have not, despite favourable policies and advantages. This study aims to understand this uneven participation by examining both micro-level factors (firm and location characteristics) and macro-level factors (institutional quality, trade integration, industrial policies). The project builds a comprehensive dataset by geocoding firm-level survey data and combining it with spatial and household survey data that varies over time and space. It integrates economic geography with trade and development economics, using difference-in-differences and case studies. Preliminary findings suggest that macro factors are essential for GVC integration, but their interaction with micro factors creates location-specific advantages.

Territory, Place, Flow, and Scale: Spatial Analysis in the IPE of Trade 

(with Benjamin Forest & Juliet Johnson, McGill University)

2024. Geopolitics: 1-25. 

DOI https://doi.org/10.1017/S0008423918000185   Publisher site 

We assess the presence and use of the geographical concepts of territory, place, flow, and scale in the International Political Economy (IPE) literature on trade. While IPE scholars have arguably responded somewhat to earlier calls to embrace geography, the uptake remains limited. Relatively few articles incorporate such concepts explicitly and tend to ignore critical scholarship on these ideas. After summarizing the theoretical dimensions of territory, place, flow, and scale in geography, we analyze publications in six leading political science/IPE journals from 2010 to 2022 to identify articles related to trade that draw on one or more of these four concepts. Using a mix of quantitative text analysis and close qualitative readings of selected articles, we find that IPE scholars occasionally use territory, flow, and scale explicitly, but more often their use is implicit. In contrast, place is used rarely, only implicitly, but perhaps offers the greatest opportunity to frame new questions in studies of trade. More generally, we conclude that explicit attention to these four concepts and their use in critical geography scholarship, would help to develop richer, more critical IPE approaches. 

The determinants of the formation of MNCs’ supply chain networks 

with Mehmet Chakkol, Nigel Driffield, and Nancy Yang, Warwick Business School

Supply chain data shows that multinational companies (MNCs) tend to retain one group of suppliers in their supply chain network over several years while replacing or removing other groups. However, systematic evidence and understanding of the determinants of supply chain formations and their performance over time is lacking in business and political economy literature. Our paper aims to address this issue and bridge the gap. We begin by asking what explains MNCs’ choices of including, excluding, and replacing certain foreign firms in their global supply chain networks: Do certain firms qualify as suppliers due to their competitive characteristics, such as productivity and production of customized inputs, as trade theory suggests, or are MNCs’ choices of suppliers driven more by macro-level factors, such as trade policy and geopolitics at large? We build a unique dyadic dataset for large US- and EU-based MNCs and their first-tier global suppliers for seven years. We employ network and statistical analysis to map and examine the determinants of MNCs’ supplier choices. The paper shows that a combination of firm-level characteristics for buyers and suppliers and changes in bilateral trade policy explain why certain firms remain in the supply chain over time while others leave. 

The effect of FDI on climate-resilient trade: cross-country evidence

 with Amelia Santos-Paulino

Foreign direct investment (FDI) and international trade are the key drivers of international production and Global Value Chains (GVCs). Despite the significant body of research on the spillover effects of FDI on growth and development, the effect of FDI on climate change in the context of trade in GVCs has received little theoretical and empirical attention. Pioneering works on the relationship between trade and environmental policies have argued that sound environmental policies in the source country decrease its exports of pollution-intensive products (the pollution haven effect) and cause the relocation of the “dirty” sector to destination countries with less commitment to environmental standards (the pollution haven hypothesis). While these studies successfully provided strong empirical evidence for the PHE, their findings supporting PHH have been less consistent. What is even more lacking is the discussion and a systematic assessment of PHE and PHH in the context of FDI patterns and growing trade in GVCs. This paper attempts to address this gap.  It asks whether GFDI from an investor country increases pollution-intensive imports from the destination country when we take into account partners’ relative positions and the decomposition of trade along supply chains. The paper utilizes data on GVCs, bilateral trade, and bilateral greenfield FDI at the sectoral level. Preliminary findings indicate that the GFDI from a source to a destination country increases the CO2 content of final exports from the destination back to the source in specific sectors, for intermediate products, when the investor is located downstream along the supply chain, and over the long term. 

UNDP's Engagement with the Private Sector, 1994-2011 

2014. Palgrave Macmillan, New York.  

ISBNs  978-1-137-44919-1; 978-1-137-44920-7

DOI https://doi.org/10.1057/9781137449207   Publisher site 

Over the past decade, intergovernmental organizations (IGOs) have significantly grown the number and scope of their partnerships with the private sector. In this context, IGOs have launched policy initiatives and projects that make the private sector's core competencies, expertise, and activities essential parts of the solution to poverty, inclusiveness, and development. As a result, the policy agendas of almost all IGOs currently incorporate the design and implementation of innovative business models and inclusive market strategies at the base of the income pyramid in developing countries. These organizations are also actively involved in the process of development, promotion, and diffusion of norms of sustainable development and corporate social responsibility. Despite the objective importance of the private sector to current development policy and practice, the causes of recent changes are among the least conceptualized and examined in the fields of IGOs, international relations theory, and development policy. Concerned with the implications that these changes in IGOs' engagement with the private sector may have for our understanding of current development policy and practice, this book asks how and why these changes occurred, and to what extent the process of norm development influenced this transformation.

Does Vulnerability to Climate Change Affect FDI Decisions of US Firms? 

with Nigel Driffield, Fred Dahlmann, and Ye He, Warwick Business School

The IPE and business literature have extensively analyzed factors influencing foreign direct investment (FDI) by foreign multinational companies (MNCs), but the role of the natural environment in these decisions has been largely overlooked. Climate change and environmental degradation impact economic activities no less than other country-level factors, posing challenges for businesses and society. While existing studies examine firms' mitigation efforts, research on climate adaptation is still in its early stages. There is a growing call for more research on the direct impacts of climate change on state and business strategies and performance, focusing on firms' responses to physical and transition risks. This paper contributes to this emerging area. It investigates how the vulnerability of host countries to climate change influences firms' FDI location decisions. By analyzing firm-level FDI data and recipient countries' climate vulnerability from 2013 to 2021, we examine whether US-based MNCs consider a host country's exposure, sensitivity, and adaptive capacity to climate change alongside political and economic factors. The study's contribution is threefold: it presents new empirical findings on firms that incorporate environmental awareness into foreign direct investment (FDI) decisions, expands the concept of “location” to include ecological factors, and provides evidence of firms’ strategic choices in climate adaptation, addressing responses to climate change and extreme weather events.