Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2017. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 145-152). / This thesis consists of three essays about international trade and wage inequality. Essay I characterizes optimal trade and FDI policies in a model with monopolistic competition and firm-level heterogeneity similar to Helpman et al. (2004). I find that both the optimal import tariffs and the optimal FDI subsidies discriminate against the more profitable foreign firms. This is because of the existence of a wedge between the private incentives of exporting and FDI firms, and the incentive of the representative agent. Essay II develops an elementary theory of global supply chains. It considers a world economy with an arbitrary number of countries, one factor of production, a continuum of intermediate goods, and one final good. Production of the final good is sequential and subject to mistakes. In the unique free trade equilibrium, countries with lower probabilities of making mistakes at all stages specialize in later stages of production. Using this simple theoretical framework, it offers a first look at how vertical specialization shapes the interdependence of nations. Essay III proposes a model that has as ingredients heterogeneity of workers and firms, complementarity between occupations within each firm and complementarity between workers and firms/occupations. The competitive equilibrium features positive assortative matching and leads to both within- and between- firm wage variations. Comparative static results are then derived to generate new insights about changes in these components of wage inequality. / by Su Wang. / 1. Optimal Trade and FDI Policies with Firm Heterogeneity -- 2. An Elementary Theory of Global Supply Chains -- 3. Assortative Matching and Wage Inequality within and across Firms. / Ph. D.

Massachusetts Institute of Technology. Dept. of Economics. Thesis. 1974. Ph.D. / MICROFICHE COPY ALSO AVAILABLE IN DEWEY LIBRARY. / Vita. / Bibliography: leaves 396-407. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1998. / Includes bibliographical references. / by Drausio S. Giacomelli. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1994. / Includes bibliographical references. / by Cesaltina Maria Pacheco Pires. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2006. / Includes bibliographical references. / This dissertation consists of three papers studying how firms allocate real and financial capital, and how taxes, the labor market and asymmetric information affect these allocation decisions. The first paper studies the response of business investment to taxes. I use the variation provided by recent reforms to the Mexican tax system, including the elimination of accelerated depreciation for investment outside the main metropolitan areas. I show that investment is very sensitive to tax changes (an elasticity of investment with respect to the user cost around -2.0), mainly due to the small open economy nature of Mexico: large responses of multinationals and large elasticity of imported assets. I also show that investment behavior is consistent with nonconvexities and irreversibilities. The results are robust to different specifications and instrumental variables approaches, and are not an artifact of tax evasion. The second paper studies the link between payout and unionization. Signaling models suggest that dividends are used to convey information about future earnings to investors. However, if unions also receive these signals, managers will be less inclined to send the signal, preventing unions from using this information when bargaining for higher salaries. / (cont.) Using data from IRS 5500 Forms to measure firm unionization, I find dividends to be better predictors of future earnings in non-unionized firms. Results are robust to different specifications and time periods, as well as to an instrumental variables approach that uses state level right-to-work laws to address unionization endogeneity. The third paper, joint with Antoinette Schoar, studies the presence and extent of Performance-Based Arbitrage (PBA) in the money manager industry. PBA (correlation between past performance and assets given by investors to arbitrageurs) prevents arbitrage from equalizing prices and fundamental values. We document the presence of PBA and show it might be profitable for investors. We show that PBA is stronger in periods of lower returns and higher volatility, and it is stronger in equity versus fixed income markets. However, we also show that PBA is weaker among managers that use arbitrage strategies, suggesting that although PBA exists, its effect on security prices might be small. / by Arturo Ramírez Verdugo. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2008. / Includes bibliographical references. / This dissertation consists of three essays on international trade and investment. In the first essay, I study how cross-country differences in labor market institutions shape the pattern of international trade with a focus on workers' skill acquisition. I develop an open-economy model in which workers undertake non-contractible activities to acquire firm-specific skills on the job. I show that protective labor laws, by increasing workers' bargaining power, induce workers to acquire more firm-specific skills relative to general skills. When sectors differ in the dependence on firm-specific skills in production, workers' investment decisions turn a country's labor laws into a source of comparative advantage. Specifically, the model predicts that countries with more protective labor laws export relatively more in firm-specific skill-intensive sectors. To test these hypotheses, I construct sector measures of firm-specific skill intensity using estimated returns to firm tenure in the U.S. over 1985-1993. Using these measures and a cross-country, cross-sector data set of 84 countries in 1995, I find support for the theoretical predictions. In the second essay, I use a firm-level panel data set of 90,000 Chinese manufacturing firms over the period of 1998-2001 to examine whether there exist productivity spillovers from foreign direct investment (FDI) to domestic firms in the same sector (horizontal spillovers), and in sectors supplying intermediate inputs to foreign affiliates (vertical spillovers through backward linkages). I find evidence of negative horizontal spillovers. While I find no evidence of vertical spillovers at the national level, domestic input suppliers' productivity growth decreases with the foreign presence in their downstream sectors in the same province. / (cont.) Second, this essay examines whether the ownership structure of foreign affiliates affects the magnitude of spillovers. I find that wholly owned and ethnic-Chinese foreign firms are associated with more negative horizontal spillovers, compared to jointly owned and non-Chinese foreign firms, respectively. I also find that negative spillovers are mostly borne by domestic firms that are state-owned, technologically-backward and located in inland provinces. The third essay studies how government political ideology determines the pattern of trade protection across countries. I hypothesize that left-wing governments are associated with relatively higher protection in labor-intensive sectors, and relatively lower protection in capital- and human-capital intensive ones, than right-wing governments. Using a cross-country, cross-sector data set of 49 countries and 27 manufacturing sectors in the late 90s, I find evidence supporting these predictions. / Heiwai Tang. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1995. / Includes bibliographical references (p. 144-145). / byt Jesús-Guillermo Llorente-Alvarez. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2012. / Cataloged from PDF version of thesis. / Includes bibliographical references (p. 132-136). / This dissertation studies the problem of motivating an expert to help a principal take a decision. The first chapter examines a principal-expert model in which the only source of friction is that the expert must be induced to acquire non-verifiable information relevant for the principal's decision. I show that contracts that specify a single transfer scheme are strictly dominated by contracts that specify a menu of transfer schemes from which the expert can choose. Optimal menu contracts often induce inefficient decision-making. Indeed., in environments where decisions affect the amount of information that is revealed ex-post. distorting decision-making in favor of decisions that reveal more information can help to provide better incentives for information acquisition. Without menus, there is an additional reason to distort decision-making. In this case, distorting decision-making is almost always optimal, and the distortions can favor decision that reveal less information ex-post. The second chapter studies the role of authority in a more general version of the principal-expert model studied in chapter 1. Contracts specify a menu of transfer schemes from which the expert can choose. I consider three possible allocations of authority: 1) Full-commitment, under which the expert's choice from the menu also determines the decision to be taken. 2) Expert-authority, under which the expert can ultimately take any decision. 3) Principalauthority, under which the principal can ultimately take any decision. I provide conditions under which any Pareto-optimal outcome implementable under full-commitment can also be implemented when either one of the parties has authority. The third chapter analyzes what happens if the expert is not motivated through a contract, but through his concern about his reputation. The expert can be a charlatan (and have no relevant information) or informed, and he privately knows his type. The principal makes inference about the expert's type based on the expert's report and on the outcome of the decision. I show that the expert's concern about his reputation coarsens the information that he can credibly transmit. As a result, decision-making is biased away from the status quo: the decision that the principal would take under the prior is taken too infrequently. / by Luis G. Zermeño Vallés. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1998. / Includes bibliographical references (leaves 111-112). / by Kristin J. Forbes. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1986. / MICROFICHE COPY AVAILABLE IN ARCHIVES AND DEWEY. / Vita. / Includes bibliographies. / by William Berkeley English. / Ph.D.