Browsing by Subject "International Trade"

Now showing 1 - 8 of 8
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    Essays in international trade.
    (2012-07) Brooks, Wyatt James
    This thesis is divided into three separate chapters. The first chapter, joint work with Alessandro Dovis, analyzes the effect of financial frictions on the gains from undergoing trade reform. Financial frictions may limit the ability of exporting firms to expand, or keep new firms from becoming exporters in response to a trade liberalization. The way that financial frictions are modeled crucially determines whether or not this happens. Empirical evidence from a trade liberalization shows that capital flows to new exporters efficiently in response to the liberalization, even though those firms are still financially constrained. This suggests that financial market inefficiency is not a barrier to realizing gains from international trade. The second chapter, joint with Pau Pujolas, examines contemporary and historical international trade data, and establishes new patterns of trade between countries of differing income levels. Existing trade models cannot simultaneously rationalize high intra-industry trade between countries of similar income levels, and low intra-industry trade between countries of different income levels. A model of non-homothetic preferences is consistent with these facts, and implies higher gains from trade than standard models. The third chapter considers the problem of a government that wants to use immigration policy as a source of fiscal revenue. Governments can allow highly productive immigrants to enter and then tax them to finance spending on their native population. Optimal policy is considered in the context of a fixed native population and pool of potential immigrants. Optimal immigration policy follows a cutoff rule in the productivity of the entering immigrant. When agents are privately informed about their own productivity, immigrants are taxed at a higher rate than natives and the effect on the native population of increased fiscal transfers may be very large.
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    Essays on Economic Sanctions
    (2018-07) Walsh, William
    Do economic sanctions impact the economy on a macro level? I address this question using Iran as a case study. Over the last 20 years, the share of Iran's total trade with western developed economies has declined. Like most other countries, Iran's trade share with emerging markets, like China and India, has risen rapidly. Unlike most other countries however, Iran has been subject to an escalating series of sanctions by the United States, United Nations, and European Union. The threat of sanctions and, in some cases, outright restrictions on trade could also explain the shift in trade behavior. This paper attempts to disentangle these two effects. I employ a methodology developed by Novy (2013), which can be used to infer a measure of bilateral trade costs from macro data on bilateral trade flows, while controlling for changes in production. In general, I find that trade costs between Iran and the Emerging Markets have fallen dramatically, indicating that output growth alone cannot explain this shift in trade. I also use a three country dynamic trade model to determine whether a disruption in trade akin to the EU oil embargo imposed on Iran in 2012 can account for the recession Iran experienced that same year. The model can accommodate heterogeneity across countries with respect to population, output, and trade flows. The environment is a three country version of Backus, Kydland, and Kehoe (B.K.K.) (1994), and I model the trade disruption by increasing bilateral trade costs. In this setting, changes in trade costs affect, not only the dynamics of capital formation, but also the steady state level of capital, and hence the long run level of per capita output. In addition, I account for the possibility of sanction evasion via transshipment by embedding a shortest path problem into the model. Goods can take multiple routes from origin to destination and, in equilibrium, flow along the lowest cost path. The model is calibrated to bilateral trade and output data, and used to evaluate the impact of the oil and gas embargo imposed by the E.U. on Iran in 2012. In addition, I use discrepancies in bilateral trade mirror statistics to test for sanction evasion via transshipment. I find that the E.U. oil and gas embargo can account for about five sixths of the 6.6 % contraction in output, none of the fall in aggregate consumption expenditures, and one fifth of the 17 % fall in gross capital formation.
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    Essays on firm choice and international trade.
    (2009-05) Lande, Katherine Nicole
    This dissertation is composed of three essays that analyze the firm choice of how to service foreign destinations and which destinations to serve. In the first essay I provide a detailed decomposition of export growth at both the firm and product level. I first look at the export characteristics of Russian firm and the relationship between export growth margins and destination country characteristics. I then decompose product level export growth, focusing primarily on newly exported products, products withdrawn from the export market, and continuously exported products exported to new destinations. I show that there is a tendency for richer, larger countries to experience less growth on each of these margins than poorer, smaller countries and then discuss a model that accounts for these facts. Additionally, I show that even though many products are withdrawn from one or more destinations, very little export value is lost. I propose models which are consistent with the findings in the data.In the second essay, I show evidence that the geographic expansion of firm exports occurs slowly over time and that a large share of growth is due to continuing exporters entering new destinations. I also show that aggregated trade data can underestimate this value and hide the differing composition of export destinations among exporter types. New exporters enter large countries and destinations with characteristics similar to their domestic market. Less similar, distant or less developed countries are entered by firms already exporting to other destinations. I formulate a dynamic general equilibrium model to test if these patterns are due to firms learning how to export (as other recent empirical findings have suggested), or exogenous factors such as productivity growth. In this model, heterogeneous firms experience learning in the form of market entry costs that depend on export history. When calibrated to Russian firm level data, I find that learning plays a significant role in explaining the observed entry patterns, which standard trade models cannot account for. Additionally, by taking learning into account and targeting particular export destinations, governments can better assess the impact of liberalizations. Finally, in the third essay co-authored with Miguel F. Ricaurte, we use industry level data to show the striking differences among sectors in the ratios of exports to FDI sales. We determine what is needed to endogenously generate this pattern of export and FDI sales when firms make the decision to service a foreign market through either exports or foreign affiliates. By calibrating a model of monopolistically competitive firms, we find that tradability of goods is not enough to capture the observed sectoral differences, as is commonly assumed. We explore variants of the model and show that sector-specific taxes on multinationals and home bias allow us to replicate these differences.
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    International specialization in research & development
    (2014-07) Evrin, Alperen
    In this paper, I examine the effects of implementing tighter Intellectual Property Rights in a model of International Trade. In my model, firms in different countries have the choice of committing their resources to introducing new products (product innovation) or to imitating and improving upon current products (process innovation). I analyze the impact of stronger patents on innovation decisions, overall welfare and the distribution of welfare among countries. I show that, depending on parameter values, firms in developed countries (North) may altogether specialize in product innovation or may attain incomplete specialization in the sense that some innovate and some imitate. Welfare analysis will depend on the degree of specialization. In the case of incomplete specialization, tighter IPRs increase the incentives for product innovation in the North but, at the same time, increase the imitation done in the South. This finding is contrary to the conventional argument that states the reverse for imitation rates. In the case of complete specialization, stronger patents do not affect the rate of product innovation but reduce the rate of imitation, and welfare is nonmonotonic in IPRs. Finally, I examine the case of Foreign Direct Investment (FDI) and predict that stronger patents will increase the FDI while lowering the wages worldwide.
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    International specialization in research & development
    (2014-07) Evrin, Alperen
    In this paper, I examine the effects of implementing tighter Intellectual Property Rights in a model of International Trade. In my model, firms in different countries have the choice of committing their resources to introducing new products (product innovation) or to imitating and improving upon current products (process innovation). I analyze the impact of stronger patents on innovation decisions, overall welfare and the distribution of welfare among countries. I show that, depending on parameter values, firms in developed countries (North) may altogether specialize in product innovation or may attain incomplete specialization in the sense that some innovate and some imitate. Welfare analysis will depend on the degree of specialization. In the case of incomplete specialization, tighter IPRs increase the incentives for product innovation in the North but, at the same time, increase the imitation done in the South. This finding is contrary to the conventional argument that states the reverse for imitation rates. In the case of complete specialization, stronger patents do not affect the rate of product innovation but reduce the rate of imitation, and welfare is nonmonotonic in IPRs. Finally, I examine the case of Foreign Direct Investment (FDI) and predict that stronger patents will increase the FDI while lowering the wages worldwide.
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    Palm Oil, Sustainability, and Global Trade: A Focus on Indonesia
    (2024-08-30) Arifin, Andrea R.; Peterson, Hikaru H.; Sommers, Scott J.
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    Russia's International Trade Policy and its Effect on Agricultural Development
    (Hubert H. Humphrey Institute of Public Affairs, 2009-12-14) Goodfellow, Kristy
    Although the Russian government is introducing new agricultural strategies and increasing government expenditure with the intention to increase agricultural production and productivity, Russia’s international trade policy is preventing the sector’s ability to become internationally competitive, therefore crippling long-term development. In short, Russia’s trade policy is causing market distortion; preventing internal reform of trade regulations and agricultural-sector support; and slowing down technology transfer.
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    Three Essays on International Trade and the Environment
    (2016-11) Jaeseok, Lee
    This dissertation is comprised of three empirical essays on linkage between international trade and the environment. The first essay is about currency exchange rate effects on economic growth and environment through energy consumption and pollution intensive industries trade. The main purpose of this paper is to investigate the impact of the USD exchange rate on real GDP and the CO2 emissions in the United States. The analysis is based on quarterly country-level data on the real trade weighted US dollar index, petroleum consumption, renewable energy consumption, net imports of pollution intensive products, real GDP and CO2 emissions from 1989 to 2015. The result of the Structural Vector Autoregressive (SVAR) model shows that the USD exchange rate is positively related to petroleum consumption, net imports by the United States with major U.S. trading partners in pollution intensive industries, real GDP and CO2 emissions. However, the exchange rate does not have a contemporaneous effect on renewable energy consumption. Moreover, petroleum consumption increases real GDP and domestic CO2 emission levels, while net imports of pollution intensive products decrease real GDP and do not significantly affect CO2 emissions. The second essay is about the effects of stringency of environmental regulations on international trade among OECD member countries. I estimate a gravity equation for bilateral trade with the Heckman two-step model to investigate the impacts of the relative stringency of environmental regulations on bilateral trade flows of energy-intensive commodities and less energy-intensive commodities. Estimated results show that relative difference of environmental regulatory stringency between trading partners has a significant influence on trade flows of energy-intensive commodities, but not on those of less energy-intensive commodities. In addition, we also found that countries import more energy-intensive products from trading partners when the partners’ environmental regulations become weaker. In the final essay, I employ the nested Constant Elasticity of Substitution (CES) model of consumer utility and study how the GMO labeling standards in Korea and Japan affect the trade flows of soybeans and social welfare in these two countries over time. The results show that GMO labeling regulations have a larger impact on GM soybean imports in the short run but, in the long run, the regulations have a greater impact on non-GM soybean imports. We also find that both consumers and producers in these two countries are better off due to the implementation of the GMO labeling regulations.