Three Essays In International Trade And Uncertainty
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Three Essays In International Trade And Uncertainty
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Author : Richard Edward Baldwin
language : en
Publisher:
Release Date : 1986
Three Essays In International Trade And Uncertainty written by Richard Edward Baldwin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1986 with categories.
Three Essays In The Theory Of International Trade Under Uncertainty
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Author : Timothy Leonard Fries
language : en
Publisher:
Release Date : 1982
Three Essays In The Theory Of International Trade Under Uncertainty written by Timothy Leonard Fries and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1982 with Commerce categories.
International Trade Under Uncertainty
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Author :
language : en
Publisher:
Release Date : 1981
International Trade Under Uncertainty written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1981 with categories.
Three Essays On Institutions And International Economic Relations
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Author : Max Büge
language : en
Publisher:
Release Date : 2012
Three Essays On Institutions And International Economic Relations written by Max Büge and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with categories.
The objective of this PhD thesis is to to empirically assess the impact of different institutional frameworks on cross-border trade and direct investment. The thesis consists of three substantive essays. In the first essay, I analyze the repercussions of institutional uncertainty on international trade. The results imply that institutional uncertainty has a significant and robust negative impact on trade volumes. The second and the third chapters of the thesis focus on particular types of contracts among sovereign nations that govern their economic relations: preferential trade agreements and bilateral investment treaties. The objective of the second essay is to test the hypothesis that a preferential trade agreements increases the bilateral investment of its members and I find a strong and robust effect (for developed and developing countries alike). Based on the results of the second chapter, I test in a third essay whether a bilateral investment treaty between a developing and a developed country influences the partners’ trade flows, but the empirical effect of bilateral investment treaties on trade collapses once strict exogeneity is accounted for.
Essays In International Trade And Development
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Author : Yelena Sheveleva
language : en
Publisher:
Release Date : 2014
Essays In International Trade And Development written by Yelena Sheveleva and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
This dissertation consists of three essays spanning the fields of international trade and economic development. In the first essay, we ask why developing countries fail to specialize in products in which they (at least potentially) have a comparative advantage? For example, farmers in land-poor developing countries overwhelmingly produce staples rather than exotic fruits that command high prices. We propose a simple model of trade and intermediation that shows how holdup resulting from poor contracting environment can produce such an outcome. We use the model to examine which polices can help ameliorate the problem, even when its cause cannot be eliminated.In the second and the third essays, we study how exporters introduce new products into the export market. In the second essay, using information on the universe of Chinese exporters to the US, we document a number of empirircal facts that discipline economists' undrstanding of dynamic aspects of multiproduct exporters. In the third essay, we estimate a structural dynamic model of multiproduct exporting.In Chapter 1, "Wheat or Strawberries? Intermediated Trade with Limited Contracting," we develop the model that provides a new explanation as to why developing countries have agricultural productivity orders of magnitude smaller than in the developing countries. We propose that due to contracting frictions agricultural producers often specialize in staples in which they have a comparative disadvantage, instead of specializing in fruits and vegetables which they can grow efficiently and which command higher prices in the export markets. While farmers can subsits on staples, farmers require services of the intermediaries to deliver cash crops to the export market. When markets are thin intermediaries hold the bulk of the bargaining power and offer a small price to the farmer for his produce. Foreseeing the hold up farmers choose to specialize in the staples.In the model, farmers can produce two types of goods: wheat and strawberries. Wheat is suitable for subsistence but farmers are inefficient in producing it. Farmers are efficient in making strawberries, but cannot subsist on it, and have to sell them to an intermediary who makes profits by selling it at the world price. In a frictionless world farmers would specialize in strawberries. Central to the model is the inability of farmers and traders to contract ex-ante on a price. The absence of enforceable contracts sets the stage for the classic hold up problem and precludes negotiating the terms of trade prior to entry into production. We use a two period model with a continuum of traders and farmers. In the first period, farmers decide whether to produce wheat or strawberries and intermediaries decide whether to enter the business of intermediation. In the second period, farmers and traders meet randomly and trade. Since meetings are random and traders do not know the number of local competitors but do know how thick the market is, they can infer the distribution of potential rivals and offer a price based on this information. In other words, traders compete for the output of farmers in the first price auction. As a result, some farmers fetch a high price for their strawberries; others fetch a low price, or even fail to meet an intermediary. Farmers make the production decision based on the expected price.We solve the model and characterize all the possible equilibria as a function of the primitive parameters. Of particular interest is the region in the parameter space that yields multiple equilibria. In the good equilibrium, specialization occurs according to comparative advantage and there is intermediation, while in the bad equilibrium, there is no intermediation and the staple is produced. Our work suggests that there may be some simple measures to ensure intermediation and specialization according to comparative advantage even if the government is not able to resolve the core issue, the underlying lack of enforceable contracts. A temporary production subsidy or a marketing board that ensures a sufficiently high minimum price to the farmer can help an economy remove the bad equilibrium without intermediation. This paper is closely related to the work of Antras and Costinot (2011). In their paper they focus on the implications of intermediation for globalization in a model that assumes that contracts between traders and producers are enforceable. In contrast we study the implications of contractual failure on production choices in a model of trade with intermediation. In Chapter 2, "Multiproduct Exporters: Empirical Regularities," we use information on Chinese exporters to the US to document a number of empirical regularities regarding dynamic multiproduct exporter behaviour. First, we confirm that scope and firm scale are positively associated. This suggests that more productive firms select to produce more products. Furthermore we find empirical regularities that are consistent with firms facing uncertainty in the export market. We explore the conjecture that firms learn about their potential in new export products trough exporting similar products. We find only tentative support for this conjecture.In chapter 3, "Multiproduct Exporters: Learning versus Knowing," we develop and estimate a structural model of multiproduct exporters based on three empirical regularities documented using data on Chinese exporters. These regularities are as follows: (1) multi-product exporters introduce their best-selling products early; (2) more than 40% of the new products introduced by incumbent exporters are dropped due to low sales within the first year; (3) for a firm, the probability of introducing a new product is positively related to the survival and success of the earlier products.The first regularity is consistent with unobserved firm-product specific heterogeneity. The second suggests that both incumbents and new exporters face uncertainty when they introduce new products. The third is consistent with firms learning about their potential in an export market, i.e., their brand effect, as they introduce new products. We develop a model which incorporates all of these features, and we estimate it structurally using data on Chinese exporters to the U.S. in the plastics industry.First, we find that known demand shocks play an important role in whether producers enter the exporting market or not. Second, we find that it is important to account for large attrition among new exporters including uncertainty about the brand effect. When we let firms know their brand effect precisely, only those with sufficiently high brand effects enter, and then the model cannot replicate disproportionately large attrition of new products among new exporters. Third, we find that while firms act consistently with learning about their brand effect, the uncertainty that firms face in conjunction with introducing new products looms large, and limits the extent to which learning affects incentives of firms to add new products. Our counterfactuals show that the distribution of products among the high brand effect firms only marginally first order stochastically dominates the distribution for low brand effect firms.Using our model we revisit the question of trade policy in the multiproduct firm setting. We simulate a decrease in the cost of introducing new products for firms. Our simulations suggest that in the presence of economies of scope and even moderate learning effects, decreasing costs of introducing subsequent products can make a significant contribution to increasing trade flows.
Essays On International Economics
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Author : Roman David Merga
language : en
Publisher:
Release Date : 2022
Essays On International Economics written by Roman David Merga and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with Foreign trade regulation categories.
"This dissertation consists of three independent chapters on International Economics. The first two chapters focus on how and why uncertainty affects international trade. The last chapter focuses on how reductions in trade barriers affect wage inequality. In the first chapter, I show that higher domestic volatility discourages exporters' investments in foreign market access, explaining the lack of involvement in international trade by developing economies. At the cross-country level, I find that country TFP volatility explains 40% of the relationship between trade and GDP per capita. Using Colombian micro-level data, I document that exporters with higher domestic sales volatility export less. New exporters expand relatively less over their life cycle in industries with higher domestic sales volatility. This dampening of the firm-level export expansion path is amplified in products with more variable markups. Motivated by these novel firm-level findings, I develop an international trade model with new exporter dynamics and variable markups that can account for the novel facts at the firm and the cross-country levels. These findings suggest that trade frictions calculated using static trade models reflect the interactions of domestic volatility and exporters' investment decisions to grow into foreign markets. Indeed my quantitative findings show that the volatility differences across countries are equivalent to a 30% higher trade cost in developing economies. These volatility differences account for 40% of the differential trade cost estimated by standard models of international trade. In the second chapter, I use a new time-varying measure of real exchange rate uncertainty (RERU) and find a negative relationship between RERU and international trade at the aggregate level. A one standard deviation increase in RERU is associated with a 5% drop in total trade over GDP. Using Colombian firm-level data, I document three firm-level facts consistent with the existence of a precautionary motive in international trade. When RERU increases, exporters: 1) reduce their export intensity, 2) are more likely to stop exporting, and 3) are less likely to start exporting to new markets. Additionally, I document that this behavior is mostly explained by exporters paying higher interest rates and facing higher shipping lags. These micro-level findings explain the cross-country results and contrast with the predictions from standard sunk cost models used in international trade. I show that incorporating firm-level debt default and international shipping lags into these standard models is enough to reconcile these models with the novel facts. In the new model, an increase in the RERU increases the probability of an exporter ending up in a financially vulnerable situation. To hedge against this risk, exporters respond by increasing markups or quitting the export market, generating a drop in aggregate exports through both the intensive and extensive trade margins. Quantitatively, the extended model predicts that a one standard deviation increase in RERU generates a drop in total exports of around 6%, consistent with the aggregate findings. In the third chapter, we use detailed employer-employee data from Spain that goes from 1987 to 2004 to understand how international trade affects the wage distribution across workers. Using a new instrumental variable approach to disentangle trade openness's effects on the distribution of income and wages, we document that an increase in local trade exposure reduces wage inequality. Furthermore, we show that this result is associated with changes at the within-industry and within-firm levels. At the within-industry level, we show that trade openness reallocates workers towards small firms and low-skilled jobs. While at the within-firm level, we find that small firms increase their labor intensity and employment, while larger firms reduce both in response to changes in trade openness. These changes are consistent with an increase in the relative demand for low-wage and low-skill workers"--Pages ix-xi.
Three Essays On The Economics Of International Firms
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Author : Maxwell Tuuli
language : en
Publisher:
Release Date : 2017
Three Essays On The Economics Of International Firms written by Maxwell Tuuli and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
"This thesis contains three distinct chapters that seek to address topics related to international trade and the organizational structure adopted by international firms. The first essay investigates the role of uncertainty in the choice of organizational structure adopted by a firm. Specifically, we study the decision to either vertically integrate or outsource production of intermediate inputs. We propose a model of incomplete contracting and unequal bargaining à la Antràs and Helpman (2004), where we incorporate demand uncertainty by assuming that firms do not know the industry demand they face before making production decisions. We find that, in the presence of demand uncertainty, firms engage more in vertical integration compared to when they know the industry demand with certainty. We also find in the theoretical model that, under uncertainty, vertical integration tendency is less strong in more capital-intensive industries. We empirically test the predictions of the model by using industry-level data from the manufacturing sector in the US and find results consistent with the implications of the model. Re-shoring, the practice of bringing manufacturing and services back to the U.S. from overseas, has become a noticeable phenomenon of some US firms especially in the past decade. In the second essay we explore the reason for this observed pattern in the US. We develop a simple theoretical model that incorporates several elements of incomplete contracts and unequal bargaining power between upstream and downstream firms. We show in this paper that an increase in bargaining power of Northern firms relative to that of their Southern contractors can trigger re-shoring if the North-South wage differential is moderate, but increases offshoring if the wage differential is very high. The third essay explores the relationship between outsourcing and the export status of firms using data from over 30 emerging and developing countries in Europe. We first develop a theoretical model that links outsourcing to the decision by firms to exportfinal output. Participating in outsourcing leads to an increase in total efficiency level of firms, which is important for export market participation. Our empirical analyses reveal that firms that engage in outsourcing are more likely to export their final output. We also find that, these firms export a higher proportion of their final output compared to firms that do not engage in outsourcing." --
Three Essays In Economics And International Politics
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Author : Robert Lowell Powell
language : en
Publisher:
Release Date : 1985
Three Essays In Economics And International Politics written by Robert Lowell Powell and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1985 with categories.
The Effects Of General Policy Uncertainty On Trade Flows And U S Wages
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Author : Tian Liu
language : en
Publisher:
Release Date : 2022
The Effects Of General Policy Uncertainty On Trade Flows And U S Wages written by Tian Liu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with categories.
This dissertation consists of three essays at the crossroads of international trade and the labor market. We measure the degree of uncertainty using a general and well-established methodology based on Baker et al. (2016). We investigate the degree to which trade policy uncertainty (TPU) at the industry-country-year level affects the global trade flows of major importers and exporters (e.g., the U.S., Canada, China, Mexico, and the European Union). Similarly, we construct the U.S. index of economic uncertainty at the industry-year level to investigate its effects on U.S. wages. In the first essay, we use a text-mining approach to construct a general index of trade policy uncertainty (TPU) for the U.S. and some of its main trade partners. This TPU index captures uncertainty on U.S. trade policy at a very detailed level (partner and industry levels) from 2001 to 2017 based on US trade-related news information. It's general, thereby enabling us to control for uncertainty relative to the use of highly-regulated tariff barriers under the WTO, temporary trade barriers (TTB), export restrictions, and potential reinterpretations of trade-related national security concerns, among others. Results suggest that a one-standard-deviation increase in policy uncertainty tends to decrease U.S. imports by 1.14 percent. In contrast, uncertainty on the trade policy applied by U.S. trade partners tends to reduce U.S. exports only to markets where the importers display a significant market power level. The results also show that the effects of trade policy uncertainty are mitigated with the formation of preferential trade arrangements (PTAs). In the second essay, motivated by the important findings of U.S. TPU effects on U.S. trade flows, we extend the study to another four markets, namely, Canada, Mexico, China, and the European Union, and their trade partners. We construct a TPU index for each of these four markets based on their news information using the same method applied to the first essay. Again, this TPU index captures uncertainty on the trade policies of these four markets at the importer-exporter-industry level from 2001 to 2017. The primary findings of the second essay are very much in line with the previous results. Uncertainty on the trade policy implemented by Canada, Mexico, China, and the EU tends to lower their imports. Specifically, a one-standard-deviation increase in policy uncertainty is associated with a decline of 0.71 percent in their imports. Moreover, uncertainty on the trade policy applied by the trade partners of these four groups is more likely to reduce their exports. Specifically, a one-standard-deviation increase in TPU leads to a decline of 0.62 percent in these four markets' exports. The impact of trade policy uncertainty on imports and exports for each of the four markets is also negative. In addition, PTAs tend to mitigate the negative effect of trade uncertainties on these four markets' trade flows. In the third essay, we study the reaction of the labor market to the economic uncertainty in the U.S. We specifically construct the U.S. economic uncertainty index with the same method we used to create the TPU in the previous two chapters on wages. The economic uncertainty index is generated based on U.S. economic-related news information that captures uncertainty on U.S. economic events and policies at the industry level from 2001 to 2018. Interestingly, the increase in economic uncertainty is likely to reduce wages in the U.S. labor market. Our result shows that the total effects of the concurrent and lagged economic uncertainty indexes cause a decline in wages by 2.12 percent. We also get plausible results by constructing alternative U.S. economic uncertainty indices using 1) newspapers released by other countries and 2) other countries' economic uncertainty indexes as instruments.
Essays On International Trade
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Author : Kairong Chen
language : en
Publisher:
Release Date : 2022
Essays On International Trade written by Kairong Chen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with Balance of trade categories.
This dissertation is comprised of three chapters focusing on international trade policy and trade finance. My first chapter studies the effects of trade policy uncertainty on US firms' global value chain relationships. Using earnings call transcripts, I apply a text-based method to measure the trade policy uncertainty perceived by firms. With the new measures, I then estimate the effects of trade policy uncertainty shocks on firms' investment, inventory, and global adjustment in the supply chain. I find that US firms' foreign customers are negatively associated with trade policy uncertainty. In contrast, their foreign suppliers are not significantly associated with trade policy uncertainty, implying that US firms have a strong reliance on foreign supply. In my second chapter, I study the interdependence between trade policy and capital control from a terms-of-trade manipulation perspective. I extend the dynamic two-country multi-good endowment economy in Costinot et al. (2014) with trade taxes. Home country chooses optimal taxes on all tradable goods and international capital flows to maximize domestic welfare, while the foreign country is passive. When only good-specific trade taxes/subsidies are available, Home has an incentive to manipulate tariffs to depreciate its real exchange rate, if it has faster-growing endowment than the Foreign. Moreover, I find that taxing capital inflow is equivalent to a uniform reduction in trade tariffs on all goods. My third chapter studies how firms determine payment methods and transportation modes jointly in international trade. This chapter incorporates choices of transportation mode into a model of trade finance, and exploits Chilean import data to examine the model's implications. In cash-in-advance or post-shipment payment cases, firms use fast transportation to reduce financial costs caused by delayed repayment for borrowers and mitigate non-payment risk of importers. Meanwhile, it creates a high freight cost. In contrast, a letter of credit separates the goods shipment and payment flow in practice and substitutes trading partners' default risk with banks' credit risk.vEmpirical analysis reveals that a transaction using airborne cargo is less likely to be on a letter of credit.