This dissertation consists of three essays, two in the field of international economics and one in macroeconomics.
The first essay studies the interaction of manufacturing firms' sourcing decisions and their R\&D investment. I propose a two-country model of sourcing where heterogeneous firms choose the sourcing destination as well as the extent to which they would like to engage in productivity-enhancing R\&D investments. Firms self-select into different combinations of sourcing modes and R\&D engagements based on their pre-R\&D, or pure productivity level. This model generates novel predictions of sorting into four different sourcing/R\&D combinations in the equilibrium. In contrast to canonical models of sourcing, this paper incorporates both extensive and intensive margins of R\&D and shows the interaction of these choices with sourcing decisions through the cost function. The model suggests that foreign sourcing decision should be complementary to R\&D investment both on the extensive margin and the intensive margin. I find empirical support for the model predictions using the ESEE data for Spanish manufacturing firms. Using an instrumental variable approach, I show that foreign sourcing is causally linked to an increase in a firm's propensity to engage in R\&D extensively and the extent of the engagement intensively.
The second essay investigates manufacturing firms' decisions to employ multiple sourcing modes simultaneously and their relationship to productivity, firm size, and capital intensity in a heterogeneous firm framework. Using a simple extension of the \cite{AntrasHelpman04} model where each firm can produce differentiated goods by sourcing from a multitude of suppliers, I show that more productive firms are able to use more varied sourcing modes, produce more products and shift a larger share of inputs away from the most basic form of sourcing into more advanced strategies. This is achieved by allowing supplier heterogeneity in the set of associated sourcing fixed costs. I show that the model predictions are consistent with stylized facts and empirical analysis with Spanish manufacturing firms. Using an instrumental analysis, the multiple sourcing patterns are found to be driven by firm-level productivity.
Finally, the third essay examines the propagation of monetary policy through the banking system in China in the context of a major banking reform in the 1990s. Using bank-level data for commercial banks over twenty years from 1986 to 2008, I examine the supply side of the narrow credit channel: loan level responses of commercial banks to monetary policy tools of the central bank. I find that banks have disparate but strong responses to different policy instruments depending on their type and level of capitalization. Moreover, the major banking reform in the 1990s has changed some characteristics of the bank-dependent propagation mechanism without diminishing its central role in monetary transmission. / Economics
| Identifer | oai:union.ndltd.org:harvard.edu/oai:dash.harvard.edu:1/33493284 |
| Date | 25 July 2017 |
| Creators | Du, Yang |
| Contributors | Antras, Pol, Melitz, Marc, Farhi, Emmanuel |
| Publisher | Harvard University |
| Source Sets | Harvard University |
| Language | English |
| Detected Language | English |
| Type | Thesis or Dissertation, text |
| Format | application/pdf |
| Rights | open |
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