This thesis investigates the role of institutions and firm behaviours in international trade. Chapter 1 estimates a dynamic general equilibrium model of entry, exit, and endogenous productivity growth. Productivity is endogenous both at the industry level (firms enter and exit) and at the firm level (firms invest in productivity-enhancing activities). Three key findings emerge. First, there is no evidence of learning by exporting: the observed positive correlation between exporting and productivity operates entirely via the impact of exporting on productivity-enhancing investments. Restated, exporting decision raises productivity, but only indirectly by making investing in productivity more attractive. Second, there is evidence of learning by producing multiple products: product-mix raises productivity directly in addition to the investment channel. Third, there are strong complementarities among the product-mix, exporting and investment decisions. Finally, we simulate the effects of reductions in foreign tariffs. This increases exporting, investing, and wages. Productivity rises at the economy-wide level both because of the between firm reallocation effect and because of within firm increases in productivity. Chapter 2 incorporates credit constraints into amodel of global sourcing and heterogeneous firms. Following Antras and Helpman(2004), heterogeneous firms decide whether to source inputs at arm’s length or within the boundary of the firm. Financing of fixed organizational costs requires borrowing with credit constraints and collateral based on tangible assets. The party that controls intermediate inputs is responsible for these financing costs. Sectors differ in their reliance on external finance and countries vary in their financial development. The model predicts that increased financial development increases the share of arm’s length transactions relative to integration in a country. The effect is most pronounced in sectors with a high reliance on external finance. Empirical examination of country-industry interaction effects confirms the predictions of the model. Chapter 3 examines whether financial development facilitates economic growth by estimating the effect of financial development on reducing the costs of external finance to firms. The data reveal substantial evidence of decreasing returns to the benefit of financial development in industries that are more dependent on external finance and countries with less financial frictions.

This thesis investigates the role of institutions and firm behaviours in international trade. Chapter 1 estimates a dynamic general equilibrium model of entry, exit, and endogenous productivity growth. Productivity is endogenous both at the industry level (firms enter and exit) and at the firm level (firms invest in productivity-enhancing activities). Three key findings emerge. First, there is no evidence of learning by exporting: the observed positive correlation between exporting and productivity operates entirely via the impact of exporting on productivity-enhancing investments. Restated, exporting decision raises productivity, but only indirectly by making investing in productivity more attractive. Second, there is evidence of learning by producing multiple products: product-mix raises productivity directly in addition to the investment channel. Third, there are strong complementarities among the product-mix, exporting and investment decisions. Finally, we simulate the effects of reductions in foreign tariffs. This increases exporting, investing, and wages. Productivity rises at the economy-wide level both because of the between firm reallocation effect and because of within firm increases in productivity. Chapter 2 incorporates credit constraints into amodel of global sourcing and heterogeneous firms. Following Antras and Helpman(2004), heterogeneous firms decide whether to source inputs at arm’s length or within the boundary of the firm. Financing of fixed organizational costs requires borrowing with credit constraints and collateral based on tangible assets. The party that controls intermediate inputs is responsible for these financing costs. Sectors differ in their reliance on external finance and countries vary in their financial development. The model predicts that increased financial development increases the share of arm’s length transactions relative to integration in a country. The effect is most pronounced in sectors with a high reliance on external finance. Empirical examination of country-industry interaction effects confirms the predictions of the model. Chapter 3 examines whether financial development facilitates economic growth by estimating the effect of financial development on reducing the costs of external finance to firms. The data reveal substantial evidence of decreasing returns to the benefit of financial development in industries that are more dependent on external finance and countries with less financial frictions.

This dissertation explores the impact of international trade on the geographic location of manufacturing activities and on regional productivity growth patterns within countries. This study develops models of trade with monopolistic competition in the context of a two-region country. It also provides empirical estimates of the e ect of tari policy on the distribution of industrial activities and on productivity growth di erentials across Colombia's regions. The rst essay investigates the consequences of trade liberalization for the distribution of manufacturing activities between large and small cities. It presents an extension of the Melitz (2003) model of trade with monopolistic competition and heterogeneous rms where producers' location and export market participation decisions depend on their productivity. As a country's exposure to trade shifts, rms and output are reallocated between large and small urban areas. Data from Colombia's manufacturing sector lend support to theoretical predictions concerning tari reduction's impact on the repartition of industrial activities between metro- and nonmetropolitan areas in this country. The second essay extends the New Economic Geography, Footloose-Capital model to examine the e ect of commercial policy on the distribution of industrial activities between regions within a country. This study aims at distinguishing theoretical cases with regard to the nature of the trade policy change or to the source of asymmetry between regions. It shows that trade liberalization can have adverse consequences for the manufacturing sector of a small or isolated region under bilateral liberalization, but a positive impact under unilateral trade liberalization. The third essay adapts the Melitz and Ottaviano (2008) model of trade with monopolistic competition, heterogeneous rms, and variable mark-ups to analyze the relationship between trade openness, regional market size, and regional aggregate industry performance. It demonstrates that the impact of trade liberalization on aggregate industry productivity growth varies across regions as a function of regional market size and proximity to foreign markets. A larger region experiences a greater increase in aggregate productivity through intra-industry reallocation of market shares. Similarly, a region with better access to international markets enjoys a higher productivity growth from tari reduction. Empirical evidence is obtained from the Colombian manufacturing sector.

Submitted by Rafael Ornelas (rafael.amaral.ornelas@gmail.com) on 2014-10-13T14:42:40Z No. of bitstreams: 1 Comparative Advantage, Heterogeneous Firms and Variable Mark-ups.pdf: 719604 bytes, checksum: a740a6997be4cfdd2be9d1a7f48aad00 (MD5) / Approved for entry into archive by BRUNA BARROS (bruna.barros@fgv.br) on 2014-10-13T17:17:33Z (GMT) No. of bitstreams: 1 Comparative Advantage, Heterogeneous Firms and Variable Mark-ups.pdf: 719604 bytes, checksum: a740a6997be4cfdd2be9d1a7f48aad00 (MD5) / Approved for entry into archive by Marcia Bacha (marcia.bacha@fgv.br) on 2014-10-14T11:58:54Z (GMT) No. of bitstreams: 1 Comparative Advantage, Heterogeneous Firms and Variable Mark-ups.pdf: 719604 bytes, checksum: a740a6997be4cfdd2be9d1a7f48aad00 (MD5) / Made available in DSpace on 2014-10-14T11:59:35Z (GMT). No. of bitstreams: 1 Comparative Advantage, Heterogeneous Firms and Variable Mark-ups.pdf: 719604 bytes, checksum: a740a6997be4cfdd2be9d1a7f48aad00 (MD5) Previous issue date: 2014-06-27 / We develop a model of comparative advantage with monopolistic competition, that incorporates heterogeneous firms and endogenous mark-ups. We analyse how these features vary across countries with different factor endowments, and across markets of different size. In this model we can obtain trade gains via two channels. First, when we open the economy, most productive firms start to export their product, then, they demand more producing factors and wages rises, thus, those firms that are less productive will be forced to stop to produce. Second channel is via endogenous mark-ups, when we open the economy, the competition gets ``tougher'', then, mark-ups falls, thus, those firms that are less productive will stop to produce. We also show that comparative advantage works as a ``third channel'' of trade gains, because, all trade gains results are magnified in comparative advantage industry of both countries. We also make a numerical exercise to see how endogenous variables of the model vary when trade costs fall.

This dissertation consists of three essays in which I study the political economy of trade agreements. Using detailed information from lobbying reports filed under the Lobbying Disclosure Act, I systematically explore the role played by both the winners and the losers of globalization. The first chapter focuses on the winners, large multinational firms lobbying in favor of the ratification of free trade agreements. The second chapter looks at these winners when they lose, studying the impact of the non-ratification of a trade agreement on their profits. The last chapter focuses on labor interests and trade unions, the losers of globlalization.The first chapter (joint with Paola Conconi and Mathieu Parenti) is focused on firms. We show that the political economy of free trade agreements (FTAs) is dominated by large firms engaged in international trade that support the ratification of these agreements. We develop a model of endogenous lobbying on FTAs by heterogeneous firms, which can explain why only large pro-FTA firms select into lobbying. The model also delivers predictions on the intensive margin of lobbying. In line with these predictions, we find that larger firms spend more supporting a given FTA, and individual firms spend more supporting FTAs that generate larger gains – i.e. larger improvements in access to foreign consumers and suppliers and smaller increases in domestic competition – and that are more likely to be opposed by politicians.The second chapter (joint with Moritz Hennicke) is an event study on the 2016 U.S. presidential election, and the subsequent shock to U.S. trade policy – the non-ratification of the Trans-Pacific Partnership (TPP). We provide empirical evidence that corporate lobbying on trade agreements matters for corporate profits. We find that stock prices of companies that lobbied in favor of the TPP underperformed following Trump’s election. On the intensive margin, we find a strong and positive relationship between the amount spent in lobbying and the cumulative losses of lobbying firms. Finally, by comparing the original TPP agreement with its newer version (CPTPP), without U.S. participation, we provide evidence that firms’ lobbying activity was related to having some specific provisions included in the agreement. In the third chapter, I focus on the role played by trade unions, studying both their lobbying expenditures and their campaign contributions to politicians. I first show that unions are the main opposing force to the ratification of FTAs, and that larger unions, operating in tradable sectors, are more likely to lobby against FTAs. I then study union’s PAC contributions to political parties. During the last three decades, more than 90% of unions’ PAC contributions were directed to Democratic candidates. This has drastically changed when the Republican party took a more protectionist stance under Trump. I find that unions that lobbied against the ratification of FTAs started contributing more to Republican congressmen, particularly those who have taken an anti-trade stance. / Doctorat en Sciences économiques et de gestion / info:eu-repo/semantics/nonPublished

This thesis consists of three self-contained essays in International Trade, Exchange Rates and Prices. Although independent, these essays share some common themes. The first two papers can be related to the vast literature on exchange rate pass-through to prices. While the first paper uses firm-product level data from Sweden to study firms’ export price response to movements in exchange rate, the second paper employs aggregate level data from Ethiopia and looks at the issue from the importers’ perspective. The third paper, like the first paper, uses Swedish firm-level data and investigates firms’ exporting behavior. The third paper, however, specifically focuses on export margins of multi-product firms and studies their response when exporting to destinations of different size and distance from the home country. / <p>At the time of the doctoral defense, the following papers were unpublished and had a status as follows: Paper 1: Manuscript. Paper 2: Manuscript. Paper 3: Manuscript.</p>

We set up a general equilibrium model, in which offshoring to a low-wage country can lead to job polarisation in the high-wage country. Job polarisation is the result of a reallocation of labour across firms that differ in productivity and pay wages that are positively linked to their profits by a rent-sharing mechanism. Offshoring involves fixed and task-specific variable costs, and as a consequence it is chosen only by the most productive firms, and only for those tasks with the lowest variable offshoring costs. A reduction in those variable costs increases offshoring at the intensive and at the extensive margin, with domestic employment shifted from the newly offshoring firms in the middle of the productivity distribution to firms at the tails of this distribution, paying either very low or very high wages. We also study how the reallocation of labour across firms affects economy-wide unemployment. Offshoring reduces unemployment when it is confined to high-productivity firms, while this outcome is not guaranteed when offshoring is also chosen by low-productivity firms.

Thesis advisor: Fabio Ghironi / In Chapter 1, I analyze the cross-country transmission of business cycles when firms relocate production abroad, at locations with lower labor costs. In the model, I distinguish between fluctuations in the number of offshoring firms (the extensive margin) and the value added per offshoring firm (the intensive margin) as separate transmission mechanisms. Firms are heterogeneous in labor productivity. They face a sunk entry cost at home and an additional fixed cost to produce offshore. The model replicates the extensive and intensive margin dynamics that I document for Mexico's maquiladora sector. Offshoring enhances the co-movement of output between the countries involved. Offshoring also reduces price dispersion across countries, because it dampens the real exchange rate appreciation that follows improvements in domestic productivity. In Chapter 2, I estimate the conditional correlations and impulse responses of three indicators of offshoring to Mexico (total value added, value added per plant, and the number of plants) for U.S. permanent technology shocks. Using data from U.S. manufacturing and Mexico's maquiladora sector, I identify U.S. permanent technology shocks in a structural VAR model with long-run restrictions. Following a positive shock, offshore production in Mexico exhibits an immediate increase along its intensive margin, but returns to its initial level over time. The extensive margin does not adjust on impact, but increases gradually towards a permanently higher level. The model of offshoring in Chapter 1 matches qualitatively the business cycle dynamics of offshoring to Mexico. In Chapter 3 (co-authored with Federico Mandelman), we analyze the dynamics of labor migration and the insurance role of remittances in a two-country, real business cycle framework. Emigration increases with the expected stream of future wage gains, and is dampened by the sunk cost reflecting border enforcement. During booms in the destination economy, the scarcity of established immigrants enhances the volatility of the immigrant wage and remittances. The welfare gain from the inflow of unskilled labor increases with the complementarity between skilled and unskilled labor, and with the share of the skilled among native labor. The model matches the cyclical dynamics of the unskilled immigration into the U.S. and remittances sent back to Mexico. / Thesis (PhD) — Boston College, 2009. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.

This thesis consists of three independent papers, ordered chronologically with respect to when they were initiated. Empirical research has established that there are large and persistent productivity differences among firms in narrowly defined industries (Bartelsman and Doms, 2000). Other studies, in particular Bernard and Jensen (1999), have shown the existence of a causal link running from ex-ante firm productivity to export decisions. Furthermore, exposure to trade has been found to enhance growth opportunities only for some firms, reallocating market shares and resources toward the more productive ones and contributing thus to aggregate productivity growth (Clerides, Lach and Tybout, 1998; Bernard and Jensen, 2004). These findings have led to the development of new theoretical models emphasizing the interaction between firm heterogeneity and fixed market entry costs in generating international trade and inducing aggregate productivity growth. The first and third chapters of this thesis extend the framework developed by Melitz (2003) to analyze the implications of  firm heterogeneity for old and new issues in international trade. The first paper studies the effect of trade liberalization between countries that differ in their relative endowment of skilled workers when growth-promoting R&amp;D activities are skill intensive with respect to goods production. In particular, the analysis focuses on the changes that falling trade costs induce on consumer welfare and on the number of firms active in the different markets. The third paper uses the heterogeneous firm framework to study the interaction between financial constraints and the market entry behavior of firms. It also analyzes whether the impact of trade liberalization on average firm productivity and on individual welfare is affected by the presence of credit frictions. The second chapter presents an empirical work that contributes to the recent but fast growing literature that studies how different institutions and their level of development affect countries comparative advantage. The analysis presented in this paper focuses on the role of legal and financial institution in driving the specialization in contract-intensive goods and on how the degree of institutional development interacts with the propensity of firms to vertical integrate with their suppliers. / Diss. Stockholm : Handelshögskolan i Stockholm, 2011

<p>Diss. Stockholm :  Stockholm School of Economics, 2013. Introduction together with 3 papers.</p>