scholarly journals The Extensive Margin of Exporting Products: A Firm-Level Analysis

2021 ◽  
Vol 13 (4) ◽  
pp. 182-245
Author(s):  
Costas Arkolakis ◽  
Sharat Ganapati ◽  
Marc-Andreas Muendler
Keyword(s):  
Market Access ◽  
Core Competency ◽  
Production Costs ◽  
Economies Of Scope ◽  
Welfare Gains ◽  
Firm Level ◽  
Nontariff Barriers ◽  
Access Cost ◽  
Global Welfare ◽  
Trade Frictions

To quantify trade frictions, we examine multiproduct exporters. We build a flexible general-equilibrium model and estimate market entry costs using Brazilian firm-product-destination data under rich demand and market access cost shocks. Our estimates show that additional products farther from a firm’s core competency come at higher production costs, but there are substantive economies of scope in market access costs. Market access costs differ across destinations, falling more rapidly in scope at nearby regions and at destinations with fewer nontariff barriers. We evaluate a counterfactual scenario that harmonizes market access costs across destinations and find global welfare gains similar to eliminating all current tariffs. (JEL D22, F12, F13, F14, O14, O19)

scholarly journals Learning-by-Doing and Cannibalization Effects at Multi-Vintage Firms: Evidence from the Semiconductor Industry

2010 ◽  
Vol 10 (1) ◽  
Author(s):  
Ralph B Siebert
Keyword(s):  
Semiconductor Industry ◽  
Random Access ◽  
Learning By Doing ◽  
Production Optimization ◽  
Production Costs ◽  
Economies Of Scope ◽  
Demand Side ◽  
Firm Level ◽  
Level Data ◽  
Adequate Measurement

Abstract Previous studies on the measurement of learning-by-doing emphasize the importance of accounting for multi-vintage effects having an impact on firms' production costs through economies of scope. This study shows that accounting for cannibalization effects on the demand side is equally important for the adequate measurement of learning. Since multi-vintage firms anticipate the demand-side cannibalization effects in their production optimization, a previously omitted incentive to decrease production is captured having an impact on the measurement of learning by doing. We derive an empirical model from a dynamic oligopoly game of learning-by-doing and allow cannibalization effects to enter from the demand side. Using quarterly firm-level data for the dynamic random access memory semiconductor industry, we find support for cannibalization effects entering firms' pricing relations resulting in higher estimated learning effects.

scholarly journals Information related service trade within firms: evidence from firm-level data in Germany

2021 ◽  
Author(s):  
Kurt A. Hafner ◽  
Jörn Kleinert
Keyword(s):  
Multinational Firms ◽  
Economies Of Scope ◽  
It Services ◽  
Firm Level ◽  
It Service ◽  
Level Data ◽  
Related Service ◽  
Foreign Affiliates ◽  
Knowledge Intensive ◽  
Parent Companies

AbstractMulti-unit firms have productivity advantages over competitors because of their use of a non-rival asset—firm-specific knowledge—in several units. Using knowledge-intensive services leads to economies of scope in production by multi-unit firms. Such headquarter are usually supplied by parent companies and serve to link different firm units. Headquarter services are difficult to quantify in statistics or surveys, except when they cross-borders and the exchange of services between MNEs and their offshore subsidiaries becomes apparent. This study therefore focuses on IT service imports to explain productivity differences among foreign affiliates of multinational firms in Germany. The authors base the analysis on the population of foreign multinational firms active in Germany and analyze what effect the import of IT services has on their productivity. They find that IT headquarter service flows have significant impacts on foreign affiliates’ productivity in general and US affiliates in particular. As the average IT-service flows (per firm and partner) from parent countries are significantly higher for US affiliates than non-US affiliates, they conclude that the import of IT services from the parent-company is a source of the productivity advantages of US affiliates in Germany.

scholarly journals Pakistan’s Experience with the Pakistan–China FTA: Lessons for CPEC

2017 ◽  
Vol 22 (Special Edition) ◽  
pp. 1-24 ◽  
Author(s):  
Theresa Theresa ◽  
Nida Jamil ◽  
Azam Chaudhry
Keyword(s):  
Free Trade Agreement ◽  
Market Access ◽  
Value Added ◽  
Trade Agreement ◽  
Policy Implications ◽  
Firm Level ◽  
Trade Data ◽  
Chinese Markets ◽  
The Impact ◽  
Tariff Reductions

As Pakistan enters the CPEC era, there is a sense of optimism as well as concern in the country, given the uncertain economic impact of this major collaboration between China and Pakistan. Using firm-level and trade data, we empirically test the impact of the 2006 free trade agreement (FTA) between the two countries on the productivity, size and value added of potentially affected Pakistani firms. These results have important policy implications for CPEC initiatives. We start with a difference-in-difference analysis, comparing trends in those sectors in Pakistan made more vulnerable by tariff reductions on Chinese goods relative to sectors for which the tariff did not change significantly. Next, we examine those sectors in Pakistan that were given greater access to Chinese markets through reductions in the Chinese tariff on Pakistani goods relative to sectors for which market access remained roughly the same. In the sectors made more vulnerable by reductions in Pakistani tariffs on Chinese goods, imports to Pakistan have risen, while productivity, value added and value added per worker have fallen relative to other sectors since the FTA. In the sectors for which Pakistan gained access to Chinese markets, exports and employment have risen, but productivity and value added have fallen relative to other sectors since the FTA.

scholarly journals What Do Trade Agreements Really Do?

2018 ◽  
Vol 32 (2) ◽  
pp. 73-90 ◽  
Author(s):  
Dani Rodrik
Keyword(s):  
Free Trade ◽  
Multinational Firms ◽  
Dispute Settlement ◽  
Market Access ◽  
Health And Safety ◽  
Free Trade Agreements ◽  
Trade Agreements ◽  
Pharmaceutical Companies ◽  
Nontariff Barriers ◽  
International Banks

Economists have a tendency to associate “free trade agreements” all too closely with “free trade.” They may be unaware of some of the new (and often problematic) beyond-the-boarder features of current trade agreements. As trade agreements have evolved and gone beyond import tariffs and quotas into regulatory rules and harmonization— intellectual property, health and safety rules, labor standards, investment measures, investor–state dispute settlement procedures, and others—they have become harder to fit into received economic theory. It is possible that rather than neutralizing the protectionists, trade agreements may empower a different set of rent-seeking interests and politically well-connected firms—international banks, pharmaceutical companies, and multinational firms. Trade agreements could still result in freer, mutually beneficial trade, through exchange of market access. They could result in the global upgrading of regulations and standards, for labor, say, or the environment. But they could also produce purely redistributive outcomes under the guise of “freer trade.” As trade agreements become less about tariffs and nontariff barriers at the border and more about domestic rules and regulations, economists might do well to worry more about the latter possibility.

scholarly journals Revenue Impacts of MPP Branded Funds: A Firm-Level Analysis

2003 ◽  
Vol 32 (2) ◽  
pp. 184-197 ◽  
Author(s):  
Paul M. Jakus ◽  
Kimberly L. Jensen ◽  
George C. Davis
Keyword(s):  
Firm Size ◽  
Market Access ◽  
Major Change ◽  
Export Promotion ◽  
Firm Level ◽  
Promotion Program ◽  
Domestic Firms ◽  
Market Promotion ◽  
Access Program ◽  
Level Analysis

The USDA's Market Access Program (formerly Market Promotion Program) recently underwent a major change to redirect all branded products export promotion funds to small domestic firms and cooperatives. The redirection responded to criticisms by the General Accounting Office of past allocations of branded products export promotion funds to large, experienced exporters. This study uses a firm-level analysis to examine whether firm size and export experience matter in how effectively firms use the promotion funds to increase their revenues. The results support neither the GAO criticisms nor the recent program redirection.

Market access, supplier access, and Africa's manufactured exports: A firm level analysis

2006 ◽  
Vol 15 (4) ◽  
pp. 493-523 ◽  
Author(s):  
Ibrahim Elbadawi ◽  
Taye Mengistae ◽  
Albert Zeufack
Keyword(s):  
Market Access ◽  
Firm Level ◽  
Manufactured Exports ◽  
Level Analysis

scholarly journals Trading Away Wide Brands for Cheap Brands

2013 ◽  
Vol 103 (6) ◽  
pp. 2554-2584 ◽  
Author(s):  
Swati Dhingra
Keyword(s):  
Product Innovation ◽  
Innovation Policy ◽  
Product Variety ◽  
Production Costs ◽  
Foreign Competition ◽  
Welfare Gains ◽  
Firm Competition ◽  
Product And Process Innovation ◽  
Product And Process ◽  
The Impact

Firms face competing needs to expand product variety and reduce production costs. Access to larger markets enables innovation to reduce costs. Although firm scale increases, foreign competition reduces markups. Firms' ability to recapture lost markups depends on the interplay between within-firm competition and across-firm competition. Narrowing product variety eases within-firm competition but lowers market share. I provide a theory detailing the impact of trade policy on product and process innovation. Unbundling innovation provides new insights into welfare gains and innovation policy. Product innovation increases welfare beyond standard gains from trade. The relative returns to innovation policy change with trade liberalization. (JEL D24, F13, O31)

scholarly journals The Global Welfare Impact of China: Trade Integration and Technological Change

2014 ◽  
Vol 6 (3) ◽  
pp. 153-183 ◽  
Author(s):  
Julian di Giovanni ◽  
Andrei A. Levchenko ◽  
Jing Zhang
Keyword(s):  
Technological Change ◽  
Productivity Growth ◽  
World Trade ◽  
Trade Integration ◽  
Welfare Gains ◽  
Welfare Impact ◽  
China Trade ◽  
The World ◽  
Global Welfare ◽  
Catch Up

This paper evaluates the global welfare impact of China's trade integration and technological change in a multi-country quantitative Ricardian-Heckscher-Ohlin model. We simulate two alternative growth scenarios: a “balanced” one in which China's productivity grows at the same rate in each sector, and an “unbalanced” one in which China's comparative disadvantage sectors catch up disproportionately faster to the world productivity frontier. Contrary to a well-known conjecture (Samuelson 2004), the large majority of countries experience significantly larger welfare gains when China's productivity growth is biased toward its comparative disadvantage sectors. This finding is driven by the inherently multilateral nature of world trade. (JEL F14, F43, 019, 033, 047, P24, P33)

Industrial proximity and vertical integration of multinational firms

2018 ◽  
Vol 22 (1) ◽  
pp. 50-67
Author(s):  
Haeyeon Yoon ◽  
Jung Hur
Keyword(s):  
Vertical Integration ◽  
Value Chain ◽  
Multinational Firms ◽  
Market Access ◽  
Multinational Firm ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
Parent Firm ◽  
Plant Allocation

Purpose With the rise of foreign direct investment and global value chain, firms organize their plant allocation across countries to take advantage of production cost reduction opportunities and market access. The purpose of this paper is to investigate the production-supply strategies of Korean firms over foreign and domestic affiliates, using industrial proximity between Korean parent firms and their affiliates. Design/methodology/approach In this paper first, using the Survey of Business Activities provided by Statistics Korea, the authors build a matching data set between a parent firm and each affiliate both in domestic and foreign countries. Second, the authors define their vertical relationship based on the input requirement coefficients of the Input-Output table (IO table). Furthermore, using the same IO table, the authors define the proximity for the pairs of the parent firm and the affiliates in domestic and foreign markets. Then, the authors test the relationship between the parent firm’s choice for foreign affiliate and their proximity index. Findings The main result shows that the stronger the industrial proximity between a final good producing firm and its input supplying affiliate is, the more likely the cross-border vertical integration is to be observed than the domestic vertical integration. Also, the authors find that the firms whose production structure accords the main result outperform and conduct more self-R&D and less R&D on trust than the other firms. Originality/value The finding is novel and original in a sense that the authors showed for the first time at firm-level microdata evidence that there is an optimal pattern of organizing supply chains within a multinational firm.

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