From the editor

The International Trade Journal, Vol. 32, No. 2 (April–June 2018)

Dear Readers,

Welcome to the second issue of The International Trade Journal (ITJ)’s thirty-second volume. The three articles in this issue look at how inward foreign direct investment (FDI) encourages domestic firms to lobby for trade protection in the United States, the impact of trade on growth in Sub-Saharan Africa, and price transmission mechanisms in the wheat market in Switzerland.

The first article, by Hak-Seon Lee, looks at how investment by foreign multinationals affects domestic firms in the United States and how these firms respond to the incoming FDI politically.¹ Lee finds that firms that use workers without sector-specific skills lobby more for trade protection than firms that use more highly specialized workers when foreign firms enter sectors in which they compete for workers. He argues that this is because these firms have to compete with the incoming foreign multinationals for workers, encouraging them to seek relief through increased trade protection.

The second article, by Pam Zahonogo, looks at the relationship between trade (imports and exports) and growth in Sub-Saharan Africa.² The author finds a robust, inverted U-shaped relationship between trade and growth. That is, growth increases as trade increases until trade reaches about 134 percent of GDP and then declines as trade increases.³ He notes that the turning point is large relative to observed levels of trade in Sub-Saharan Africa.

The third and final article, by Roberto Esposti and Giulia Listorti, looks at how price changes in international wheat markets affect wheat prices in Switzerland.⁴ The authors describe how regulations and differential treatment at the border effectively segment the Swiss wheat market into separate markets for wheat used for food and wheat used for animal feed. They show that price changes in the international market affect the Swiss price of wheat for food use. They also show that the Swiss wheat market for feed use is essentially isolated from international markets.

As usual, we would like to acknowledge the people without whom the ITJ would not succeed. We would like to thank the authors for their contributions, the anonymous referees for the detailed and timely comments they provide, the team at the International Trade Institute at Texas A&M International University who ensure that submissions are processed quickly and efficiently, our Editorial Board for their expert guidance, and our publisher, Taylor and Francis, for ensuring the high quality of the ITJ.

Notes

¹ In a related paper, Lee (2014) looks at how outward foreign direct investment by multinationals in the United States affects lobbying by the suppliers of these firms.

² In a related paper, Ribeiro and others (2016) look at how exports affect growth in the EU. They find that where and what countries export affect growth in these countries.

³ The threshold is lower when he focuses on imports and higher when he focuses on exports.

⁴ In a related paper on price transmission in agricultural markets, Lee and Valera (2016) look at price transmission in Asian rice markets.