Essays in international trade and development

Abstract

In the fields of international trade and economic development, the behaviors of individual firms are often at the center of attention. What unites the essays in this thesis is their focus on studying the aggregate effects of individual firm decisions. Chapter 2 demonstrates that pressure from foreign competition can reduce managerial slack in domestic firms, and that this was a substantial source of productivity gains in Chile following the country's unilateral trade liberalization in the 1970s. Chapter 3 demonstrates theoretically how firms' choices of organizational structure lead to the high skill premium seen among large firms. Finally, in Chapter 4, I show that in an environment where firm market power differs across industries, firm technological upgrading decisions amplify market distortions and increase allocative inefficiency.