@article{MTMT:34284088, title = {Gains from trade liberalization with flexible extensive margin adjustment}, url = {https://m2.mtmt.hu/api/publication/34284088}, author = {Hsieh, Chang -Tai and Li, Nicholas and Ossa, Ralph and Yang, Mu-Jeung}, doi = {10.1016/j.jinteco.2023.103756}, journal-iso = {J INT ECON}, journal = {JOURNAL OF INTERNATIONAL ECONOMICS}, volume = {142}, unique-id = {34284088}, issn = {0022-1996}, abstract = {We propose a sufficient statistic to measure the ex-post welfare gains from trade in CES models featuring any productivity distribution and any pattern of selection into production and exporting. This statistic is based on a single data moment, the change in the market share of continuing domestic producers, and a single structural parameter, the elasticity of substitution between products. We apply our statistic to measure Canada's gains from the Canada-US Free Trade Agreement using data on observed firm selection. We find that welfare gains can sub-stantially deviate from welfare estimates implied by formulas that assume a constant extensive margin trade elasticity.& COPY; 2023 Elsevier B.V. All rights reserved.}, keywords = {SELECTION; liberalization; FIRMS; TRADE; WELFARE; Extensive margin; Sufficient statistic}, year = {2023}, eissn = {1873-0353} } @article{MTMT:33894584, title = {Heavy tailed but not Zipf: Firm and establishment size in the United States}, url = {https://m2.mtmt.hu/api/publication/33894584}, author = {Kondo, Illenin O. and Lewis, Logan T. and Stella, Andrea}, doi = {10.1002/jae.2976}, journal-iso = {J APPL ECONOM}, journal = {JOURNAL OF APPLIED ECONOMETRICS}, unique-id = {33894584}, issn = {0883-7252}, abstract = {Heavy tails play an important role in modern macroeconomics and international economics. Previous work often assumes a Pareto distribution for firm size, typically with a shape parameter approaching Zipf's law. This convenient approximation has dramatic consequences for the importance of large firms in the economy. But we show that a lognormal distribution, or better yet, a convolution of a lognormal and a non-Zipf Pareto distribution, provides a better description of the US economy, using confidential Census Bureau data. These findings hold even far in the upper tail and suggest that heterogeneous firm models should more systematically explore deviations from Zipf's law.}, keywords = {granularity; Zipf's Law; Pareto; lognormal; firm size distribution}, year = {2023}, eissn = {1099-1255} } @article{MTMT:34263628, title = {Price dispersion and the stability of trade}, url = {https://m2.mtmt.hu/api/publication/34263628}, author = {Oglend, Atle and Asche, Frank and Pincinato, Ruth Beatriz Mezzalira and Straume, Hans-Martin}, doi = {10.1111/sjoe.12526}, journal-iso = {SCAND J ECON}, journal = {SCANDINAVIAN JOURNAL OF ECONOMICS}, volume = {125}, unique-id = {34263628}, issn = {0347-0520}, abstract = {Research on trade relationships has documented a high rate of relationship breakup and churning. We use data on Norwegian exports to document two stylized facts about the stability of trade relationships. First, the probability of relationship breakup increases in the deviation of the relationship-specific price from a reference price. Second, relationship hazards follow Zipf's law. We propose a search model with limited information and search frictions to explain these facts. Reference prices provide information on outside trade options that inform optimal breakups, leading to the first stylized fact. Strong heterogeneity in breakup frictions across relationships can explain the Zipf's law hazards.}, keywords = {price dispersion; transaction data; Search costs; trade duration}, year = {2023}, eissn = {1467-9442}, pages = {789-820} } @article{MTMT:32975597, title = {The Twin Peaks of the Export Intensity Distribution}, url = {https://m2.mtmt.hu/api/publication/32975597}, author = {Defever, Fabrice and Riano, Alejandro}, doi = {10.1093/jeea/jvac006}, journal-iso = {J EUR ECON ASSOC}, journal = {JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION}, volume = {20}, unique-id = {32975597}, issn = {1542-4766}, abstract = {Received wisdom suggests that most exporters sell most of their output domestically. We show, however, that the distribution of export intensity varies substantially across countries and is often bimodal, displaying "twin peaks"-that is, large shares of both low- and high-intensity exporters coexisting alongside each other within a country. We reconcile this new stylized fact with an otherwise standard model of trade in which firms face firm-destination-specific revenue shifters that follow a lognormal distribution with sufficiently high dispersion. We structurally estimate the model and show that differences in countries' size relative to the rest of the world can account for most of the observed cross-country variation in the distribution of export intensity in our data. While policies that incentivize firms to export a high share of their output account for a substantial share of the variation in the dispersion of firm-destination revenue shifters, they cannot fully account for the widespread prevalence of twin peaks around the world.}, year = {2022}, eissn = {1542-4774}, pages = {1347-1394} } @article{MTMT:33008830, title = {FLEXIBILITY AND PRODUCTIVITY: TOWARD THE UNDERSTANDING OF FIRM HETEROGENEITY}, url = {https://m2.mtmt.hu/api/publication/33008830}, author = {Macedoni, Luca and Xu, Mingzhi (Jimmy)}, doi = {10.1111/iere.12563}, journal-iso = {INT ECON REV}, journal = {INTERNATIONAL ECONOMIC REVIEW}, unique-id = {33008830}, issn = {0020-6598}, abstract = {We document four new stylized facts using Chinese firm-level data to show that the standard single-attribute model of trade, in which firms only differ in productivity, must be augmented with an additional layer of heterogeneity to match the facts. To match the evidence, a model requires heterogeneity in flexibility, namely, the ability to introduce new varieties in a destination at low costs. We calibrate our model and find suggestive evidence of a trade-off between productivity and flexibility. Furthermore, we show that ignoring firm flexibility causes a large underestimation of the welfare effects of trade.}, year = {2022}, eissn = {1468-2354} } @article{MTMT:32795720, title = {How the breadth and depth of import relationships affect the performance of Canadian manufacturers}, url = {https://m2.mtmt.hu/api/publication/32795720}, author = {Bombardini, Matilde and Keith Head, C. and Tito, Maria D. and Wang, Ruoying}, doi = {10.1111/caje.12559}, journal-iso = {CAN J ECON}, journal = {CANADIAN JOURNAL OF ECONOMICS / REVUE CANADIENNE D ECONOMIQUE}, volume = {54}, unique-id = {32795720}, issn = {0008-4085}, year = {2021}, eissn = {1540-5982}, pages = {1525-1561} } @article{MTMT:32321266, title = {Global ownership patterns}, url = {https://m2.mtmt.hu/api/publication/32321266}, author = {Mariscal, Asier}, doi = {10.1016/j.jedc.2021.104213}, journal-iso = {J ECON DYN CONTROL}, journal = {JOURNAL OF ECONOMIC DYNAMICS & CONTROL}, volume = {131}, unique-id = {32321266}, issn = {0165-1889}, abstract = {To analyze multinationals' market entry, I assemble a new dataset of cross-border mergers and acquisitions (M&A) for 1985-2019, with sales for the parent and target firms. Seven main facts emerge: (1) the number of acquisitions per parent has a Pareto distribution; (2) the number of different industries and countries entered per parent has a similarly shaped Pareto distribution; (3) parents entering unpopular industries or countries are large, as measured by global sales; (4) at the parent level, the number of industries and the number of countries entered is highly correlated; (5) the percent of zero parent-level M&A flows across destination industry-countries is 99%, and obeys a gravity relation; (6) single-industry and single-country parents are very prevalent (around 50%), but their sales share is low (around 10%); (7) there is positive assortative matching between parent and target sales. A balls-and-bins model (ala Armenter and Koren, 2014) quantitatively matches many of the facts due to the sparsity of M&A data. Three unmatched facts provide information for future theories: parent entry by market popularity, single-market multinational parents' prevalence and sales share, and assortative matching between parent and target sales. (C) 2021 Published by Elsevier B.V.}, keywords = {quantitative analysis; Mergers and acquisitions; Pareto distribution; Probabilistic model; multinational corporations; firm-level data; Multinational production}, year = {2021}, eissn = {1879-1743} } @article{MTMT:31450742, title = {Export decision under risk}, url = {https://m2.mtmt.hu/api/publication/31450742}, author = {De Sousa, Jose and Disdier, Anne-Celia and Gaigne, Carl}, doi = {10.1016/j.euroecorev.2019.103342}, journal-iso = {EUR ECON REV}, journal = {EUROPEAN ECONOMIC REVIEW}, volume = {121}, unique-id = {31450742}, issn = {0014-2921}, abstract = {We show that economic uncertainty in foreign markets affects firms' economic decisions, particularly those of the most productive firms. Using export data at both the industry and firm levels, we uncover two empirical regularities. First, demand uncertainty in foreign markets affects export entry/exit decisions (extensive margin) and export sales (intensive margin). If all destination countries exhibited the lowest volatility observed across destinations, then total French exports would rise by approximately 18% (an increase primarily driven by the extensive margin). Second, the most productive exporters are more affected by a higher industry-wide expenditure volatility than are the least productive exporters. The 25% most productive firms export, on average, 27% more in value than the 25% least productive firms in less volatile markets, while this difference decreases to 12% in the most volatile markets. (C) 2019 Elsevier B.V. All rights reserved.}, keywords = {demand uncertainty; SKEWNESS; Firm exports; Expenditure volatility}, year = {2020}, eissn = {1873-572X} } @article{MTMT:31074684, title = {Firm heterogeneity and exports in the Netherlands. Identifying export potential beyond firm productivity}, url = {https://m2.mtmt.hu/api/publication/31074684}, author = {Brakman, Steven and Garretsen, Harry and van Maarseveen, Raoul and Zwaneveld, Peter}, doi = {10.1080/09638199.2019.1631876}, journal-iso = {J INT TRADE ECON DEV}, journal = {JOURNAL OF INTERNATIONAL TRADE & ECONOMIC DEVELOPMENT}, volume = {29}, unique-id = {31074684}, issn = {0963-8199}, abstract = {According to the Melitz [2003. 'The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity.' Econometrica 71: 1695-1725] model, potential exporters have to be sufficiently productive to overcome the entry costs of foreign markets. Once firms pass this productivity threshold, they all export. However, empirical evidence indicates that a substantial share of highly productive top-performing firms does not export. In this paper, we focus specifically on this group of high-performing non-exporters and identify the factors that prevent them from successfully exporting. We employ a large Dutch administrative dataset containing both small and large firms in services and manufacturing for the period 2010-2016. Our main findings are two-fold. First, controlling for high productivity identifies other factors that need to be fulfilled for exporting firms. Firm size, import status, and foreign ownership are important determinants of a firm's future export activity. Second, firm location is crucial. A location in more peripheral areas increases the probability that high-productive firms do not export, whereas a location close to the border increases export probabilities.}, keywords = {LOCATION; PRODUCTIVITY; firm heterogeneity; export behavior}, year = {2019}, eissn = {1469-9559}, pages = {36-68} } @article{MTMT:31074755, title = {Offshoring and firm overlap. Welfare effects with non-sharp selection into offshoring}, url = {https://m2.mtmt.hu/api/publication/31074755}, author = {Capuano, Stella and Egger, Harmut and Koch, Michael and Schmerer, Hans-Joerg}, doi = {10.1111/roie.12445}, journal-iso = {REV INT ECON}, journal = {REVIEW OF INTERNATIONAL ECONOMICS}, volume = {28}, unique-id = {31074755}, issn = {0965-7576}, abstract = {Using German establishment data, we provide evidence for selection of larger, more productive producers into offshoring. However, the selection is not sharp, and offshoring and nonoffshoring producers coexist over a wide range of the revenue distribution. To explain this overlap, we set up a model of offshoring, in which we decouple offshoring status from revenues through heterogeneity in two technology parameters. In an empirical analysis, we employ German establishment data to estimate key parameters of the model and show that disregarding the overlap has large quantitative effects. It lowers the estimated gains from offshoring by almost 50% and, at the same time, exaggerates the role of the extensive margin for explaining the evolution of German offshoring since the 1990s.}, year = {2019}, eissn = {1467-9396}, pages = {138-157} } @article{MTMT:31074754, title = {The double EMG distribution and trade elasticities}, url = {https://m2.mtmt.hu/api/publication/31074754}, author = {Sager, Erick and Timoshenko, Olga A.}, doi = {10.1111/caje.12412}, journal-iso = {CAN J ECON}, journal = {CANADIAN JOURNAL OF ECONOMICS / REVUE CANADIENNE D ECONOMIQUE}, volume = {52}, unique-id = {31074754}, issn = {0008-4085}, abstract = {Using Brazilian export data that, unlike many trade data sets, have a full record of small export sales, this paper reconsiders trade elasticities and the welfare gains from trade. Using the Brazilian data, this paper provides novel evidence on the properties of the distributions of log-export sales and shows that the double exponentially modified Gaussian (EMG) distribution parsimoniously captures these properties. Using the double EMG distribution in a standard monopolistic competition model of trade, this paper demonstrates that data truncation, which is prevalent in many data sets, leads to an upward bias in measuring the partial elasticity of trade with respect to variable trade costs. This bias subsequently leads to the underestimation of the gains from trade by 1% to 9% depending on the extent of data truncation, a range that is commensurate with typical economic growth and large booms. Resume Double distribution gaussienne modifiee de facon exponentielle (EMG) et elasticites commerciales. En s'appuyant sur les donnees relatives aux exportations bresiliennes consignant, contrairement a de nombreux autres ensembles de donnees, tous les volumes de ventes a l'exportation y compris les plus petits, cet article reexamine l'elasticite des echanges et les bienfaits sociaux en decoulant. Grace a ces donnees, l'article offre un nouvel eclairage sur les proprietes des distributions relatives aux ventes a l'exportation consignees, et montre que la double distribution gaussienne modifiee de facon exponentielle (EMG) ne reflete que partiellement ces proprietes. En utilisant cette double distribution dans un modele commercial standard caracterise par une concurrence monopolistique, cet article demontre que la troncature des donnees, frequente dans de nombreux ensembles de donnees, genere des erreurs systematiques par exces lorsque l'on mesure l'elasticite partielle des echanges par rapport aux couts commerciaux variables. Consequemment, ce biais conduit a une sous-estimation des gains commerciaux de 1 a 9 %, dependamment de l'ampleur de la troncature des donnees, et comparable a une croissance economique typique ou en forte expansion.}, year = {2019}, eissn = {1540-5982}, pages = {1523-1557} } @article{MTMT:30571089, title = {Effects of Islamic religiosity on bilateral trust in trade: The case of Turkish exports}, url = {https://m2.mtmt.hu/api/publication/30571089}, author = {Lo Turco, Alessia and Maggioni, Daniela}, doi = {10.1016/j.jce.2018.02.001}, journal-iso = {J COMP ECON}, journal = {JOURNAL OF COMPARATIVE ECONOMICS}, volume = {46}, unique-id = {30571089}, issn = {0147-5967}, abstract = {Using a rich firm level data set for Turkish manufacturing, we test whether sharing similar religious beliefs with potential contracting parties drives a firm's first time entry into export markets. We exploit variation in the practice of Islam across Turkish NUTS3 regions and we find that firms located in regions characterised by stronger religiousness are more likely to enter export destinations with a higher share of Muslims among their population. This result is robust to the control for past trade, common language, cultural and migration ties as well as for selective trade policy in favour of politically connected religious business groups. In particular, religious proximity eases export entry for producers of "trust intensive" goods, it favours subsequent foreign market entries and reduces the export exit probability. All in all, our evidence supports an export enhancing effect of religious proximity working through export sunk costs reduction rather than through similarity in preferences.}, keywords = {UNCERTAINTY; Islam; Export entry; Religious proximity}, year = {2018}, eissn = {1095-7227}, pages = {947-965} } @article{MTMT:30571088, title = {IMPACT OF CHANGES IN HUMAN CAPITAL POTENTIAL ON MACROECONOMIC TRENDS}, url = {https://m2.mtmt.hu/api/publication/30571088}, author = {Miletic, Zoran and Plazonic, Nikolina}, journal-iso = {EKON VJESN}, journal = {EKONOMSKI VJESNIK / ECONVIEWS}, volume = {31}, unique-id = {30571088}, issn = {0353-359X}, abstract = {A decline in labour force and wage cuts are among the factors that determine macroeconomic trends. Since workers are normally motivated by significantly higher wages in other companies, these factors can reduce labour mobility. Moreover, we are witnessing trends related to the share of labour force, capital and output growth. This paper supports the thesis according to which these trends are rooted in the increase of the market power starting from the 1980s.}, keywords = {MARGINS; macroeconomic trends; market power}, year = {2018}, eissn = {1847-2206}, pages = {413-425} } @article{MTMT:26533497, title = {International aspects of merger policy: A survey}, url = {https://m2.mtmt.hu/api/publication/26533497}, author = {Breinlich, Holger and Nocke, Volker and Schutz, Nicolas}, doi = {10.1016/j.ijindorg.2016.05.001}, journal-iso = {INT J IND ORGAN}, journal = {INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANIZATION}, volume = {50}, unique-id = {26533497}, issn = {0167-7187}, year = {2017}, eissn = {1873-7986}, pages = {415-429} } @article{MTMT:26711215, title = {"Glocal" ties: banking development and SEs' export entry}, url = {https://m2.mtmt.hu/api/publication/26711215}, author = {Lo, Turco Alessia and Maggioni, Daniela}, doi = {10.1007/s11187-016-9809-7}, journal-iso = {SMALL BUS ECON}, journal = {SMALL BUSINESS ECONOMICS}, volume = {48}, unique-id = {26711215}, issn = {0921-898X}, year = {2017}, eissn = {1573-0913}, pages = {999-1020} } @article{MTMT:24271241, title = {The network structure of international trade}, url = {https://m2.mtmt.hu/api/publication/24271241}, author = {Chaney, T}, doi = {10.1257/aer.104.11.3600}, journal-iso = {AM ECON REV}, journal = {AMERICAN ECONOMIC REVIEW}, volume = {104}, unique-id = {24271241}, issn = {0002-8282}, year = {2014}, eissn = {1944-7981}, pages = {3600-3634} }