|
on International Activities of Firms |
| By: | Laura Alfaro; Paola Conconi; Fariha Kamal; Zachary Kroff |
| Abstract: | Traditional theories of firm boundaries predict trade between vertically related units of the same firm. Using novel data that combine a comprehensive mapping of U.S. multinationals’ production networks with their customs filings, we uncover a strong positive relationship between input-output linkages and trade between parents and their affiliates. We also find that intrafirm trade is prevalent, particularly between geographically proximate units: three-quarters of affiliates in North America trade with their U.S. parent. These results overturn prior findings based on survey data on intrafirm trade. Administrative intrafirm records enable correcting measurement errors in survey data, reconciling traditional theories with empirical evidence. |
| Keywords: | multinational enterprises, intrafirm trade, input-output linkages |
| JEL: | F14 F23 D23 L20 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12394 |
| By: | Fabrice Defever; Emanuel Ornelas |
| Abstract: | We study how the end of the quota system for textiles and clothing products in the American and European markets on January 1, 2005, affected China’s exports to third countries, where policy was unchanged. Using a difference-in-differences approach, we find that the number of Chinese firms exporting previously restricted products to third countries increased sharply after quota removal. The expansion involved many private firms that exported to neither US-EU markets before nor after 2005. This indicates that the policy shock enhanced China’s role as an export base. Conversely, protectionist shifts in large economies would likely generate sizeable negative third-market effects. |
| Keywords: | import quotas, export entry, China |
| JEL: | F13 F14 D22 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12511 |
| By: | Ritsuko Iseki (UTokyo Economic Consulting); Daisuke Miyakawa (Waseda University); Shigehiro Shinozaki (Asian Development Bank) |
| Abstract: | This paper dissects the impact of United States (US) tariffs introduced in 2025 on firm exports, concentrating on heterogeneity. Using comprehensive export customs data to the US from six selected Asian countries from January 2024 to August 2025, we confirm that for the first few months after tariffs were announced, export prices fell slightly, compressing profit margins, while the values and export quantities were not largely affected. In terms of the extensive margin, there was on average no systematic increase in short-run exit from exports to the US. Second, exporters of products with higher (lower) demand elasticity lowered prices before tariffs to a larger (smaller) extent. Third, based on Philippine export customs data, micro, small, and medium-sized enterprises (MSMEs) showed more uniform and deeper price cuts that resulted in lower exit rates on average even as their market access admittedly weakened for easily substituted products. In contrast, larger firms continued participation using more flexible and product specific adjustments. Together, these results suggest that tariffs substantially compressed margins among MSMEs over the short run in order to maintain US export levels. |
| Keywords: | tariffs;firm dynamics;heterogeneity;demand elasticity;MSME exports;global supply chain |
| JEL: | D22 F13 F14 L25 |
| Date: | 2026–02–26 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:022298 |
| By: | Klaus Abberger; Arbërim Bibaj; Hans Gersbach; Alexis Perakis; Alexander Rathke; Samad Sarferaz; Kieran Walsh |
| Abstract: | We study how firms’ expectations respond to prospective tariff shocks using a randomized survey experiment among Swiss manufacturing firms. When confronted with potential U.S. tariffs, respondents expect sizable declines in turnover and investment, yet anticipate increases in ex-tariff export prices despite falling demand. This combination of declining activity and rising prices runs counter to the standard prediction of trade models, in which tariffs reduce foreign demand and put downward pressure on exporters’ prices. The observed pattern is consistent with a destination-specific cost-push mechanism, whereby tariffs raise exporters’ marginal costs through compliance burdens, logistical frictions, or reduced scale. Embedding firms’ stated price and sales expectations in a parsimonious structural pricing model, we quantify the implied cost changes and recover sector-level demand elasticities. The estimates indicate substantial heterogeneity across industries and are, on average, consistent with short-run trade elasticities from the recent literature. Moreover, we corroborate the experimental evidence using panel survey data on firms’ expectations around an unexpected U.S. tariff announcement. |
| Keywords: | international trade, tariffs, firm expectations, pricing, cost pass-through |
| JEL: | F13 D22 E31 D84 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12510 |
| By: | Wagner, Joachim |
| Abstract: | This short note looks at the link between churning of exporters and dynamics of exports using data from the World Bank Exporter Dynamics Database from 69 countries primarily for the period between 2003 and 2010. In line with Schumpetarian theory of creative destruction we report that a higher rate of turnover in export activity by entry and exit of firms in the year before is positively linked to export growth in the current year after controlling for unobserved time-invariant country effects and country-invariant time effects. Creative destruction is at work in exports. |
| Keywords: | Exporter Dynamics Database, creative destruction, export entry, export exit |
| JEL: | F14 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:kcgwps:337456 |
| By: | Laudage, Sabine; Riedel, Nadine; Schmidt, Katharina; Strohmaier, Kristina; Voget, Johannes; Wickel, Sophia |
| Abstract: | In recent years, a growing number of countries have enacted tax rules that require multinational enterprises (MNEs) to document their intra-firm trade prices and show that they are set as in third-party trade. The objective of these rules is to limit opportunities for strategic trade mis-pricing and profit shifting to lower-tax affiliates. In this paper, we study the regulations' fiscal and real effects. Testing ground is the introduction of transfer pricing (TP) documentation rules in France in 2010. Drawing on rich firm-level data, we show that affected MNEs reduced their outward profit shifting from France, while simultaneously lowering real investments in the country. Outside of France, treated MNEs decreased their real economic activity at low-tax (but not at high-tax) group locations. |
| Keywords: | multinational firm, corporate taxation, profit shifting |
| JEL: | F21 F23 H25 H26 H87 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:337486 |
| By: | Alicia H. Dang (Department of Economics, Union College); Joyce P. Jacobsen (Department of Economics, Hobart and William Smith Colleges, and Wesleyan University); Sooyoung A. Lee (Department of Economics, Hobart and William Smith Colleges); Ngoc Q. Pham (FPT School of Business & Technology, FPT University) |
| Abstract: | Many concerns surround the continuing globalization of commerce and employment, including the concern that these processes have led to unstable working conditions, including more use of temporary workers. Despite these public fears, the trade literature to date has found little evidence that either exporting or importing leads to hiring a higher share of temporary workers. We analyze whether increased engagement in international trade has led to changes in the use of temporary workers in Vietnam, a country that has recently rapidly integrated into the world economy. Using data from two six-year balanced panels of the Vietnamese Enterprise Survey, covering 2010-2015 and 2017-2022, we utilize propensity score matching techniques to look for the effect of engaging in international trade on labor force composition in the manufacturing, wholesale and retail trade, and services sectors. We find during both time spans that firms newly engaging in international trade make lower use of temporary workers, both relative to non-traders, and overall, even as they maintain their overall employment and raise their wages. |
| Keywords: | Vietnam, trade, temporary workers |
| JEL: | D22 F16 J23 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:wes:weswpa:2026-004 |
| By: | Gimenez Perales, Victor |
| Abstract: | New importers increase their conditional survival rate and import share over time. However, a model of multi-input firms with an import entry cost and stochastic import costs cannot replicate these dynamics. I show that an extended model can be reconciled with the data. I calibrate both models and use them to identify the effects of trade shocks. The simulations show that a decrease in import prices with the new importer dynamics generates lower productivity gains, but these gains are more widespread across firms. |
| Keywords: | importer dynamics, trade shocks, gains from trade |
| JEL: | F12 F13 L11 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:337450 |