The Dynamics of Global Sourcing (Job market paper)
Abstract: Though input trade accounts for a significant share of global trade, little has been done to study the movement of firms in and out of import markets. To fill in the gap, this paper presents and estimates a dynamic, multi-country model of input imports with heterogeneous firms. The model incorporates intra-temporal interdependence across countries, while an inter-temporal link is embedded in the country-specific sunk entry costs. Using a sample of Chinese chemical producers between 2000 and 2006, I obtain the bounds for the fixed and sunk costs of importing by applying a partial identification approach under the revealed preferences assumption. The baseline results indicate that source countries are complementary, and whereas a continuing importer pays between 7.81% and 27.06% of the average marginal revenue gain, the average importing cost for a new importer is higher, ranging between 12.87% and 39.75% of the revenue gain of importing from a new source. The existence of interdependence across countries and location-specific sunk costs implies that temporary trade policy changes in one market can have long-lasting externalities on other markets.
Anticipation Effect of the TPP on Vietnamese Manufacturing Firms
Abstract: Using a firm-level dataset between 2010 and 2017, I study whether Vietnamese firms adjusted their productivity in anticipation of the Trans-Pacific Partnership (TPP). I find that an expected reduction of 10 percentage points in export tariffs leads to a 4% increase in productivity in 2016, the year that the TPP was signed and highly anticipated. However, an expected reduction of 10 percentage points in import tariffs causes a 3% decrease in productivity. The results are consistent with the notion that improved access to export markets and future export revenues encourage productivity-enhancing activities, while increased foreign competition, which lowers future revenues, discourages firms from improving productivity.
Work in Progress
The Global Costs and Benefits of Export Promotion
(with Magnus Buus, and Joel Rodrigue)