|
on International Trade |
|
Issue of 2025–09–15
eight papers chosen by Nicola Daniele Coniglio, Università degli Studi di Bari “Aldo Moro” |
| By: | Elhanan Helpman |
| Abstract: | Foreign trade has significantly contributed to global improvements in living standards, a reduction in global inequality since the mid-1990s, and the lifting of millions out of extreme poverty. These gains were supported by the rules-based international order established after World War II. However, these achievements are now under threat. Escalating trade wars risk not only causing significant economic harm to both the United States and low-income countries, but also exacerbating geopolitical tensions. |
| JEL: | F1 F13 F15 F5 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34189 |
| By: | Alonso Alfaro-Ureña (Economic Division, Central Bank of Costa Rica); Juanma Castro-Vincenzi (Harvard University); Sebastián Fanelli (CEMFI); Eduardo Morales (Princeton University) |
| Abstract: | We estimate a model of firm export dynamics featuring cross-country complementarities. The firm decides where to export by solving a dynamic combinatorial discrete choice problem, for which we develop a solution algorithm that overcomes the computational challenges inherent to the large dimensionality of its state space and choice set. According to our estimated model, firms enjoy cost reductions when exporting to countries geographically or linguistically close to each other, or that share deep trade agreements; and countries, especially small ones, sharing these traits with attractive destinations receive significantly more exports than in the absence of complementarities. ***Resumen: Estimamos un modelo de la dinámica de exportación de empresas que incluye complementariedades entre países. La firma decide a dónde exportar resolviendo un problema de elección discreta combinatoria dinámica, para el cual desarrollamos un algoritmo de solución que supera los desafíos computacionales inherentes a la gran dimensionalidad de su espacio de estados y conjunto de opciones. Según la estimación de nuestro modelo, las empresas experimentan reducciones de costos al exportar a países que están geográfica o lingüísticamente cercanos entre sí, o que comparten acuerdos comerciales profundos; y los países, especialmente los pequeños, que comparten estas características con destinos atractivos, reciben significativamente más exportaciones que en ausencia de complementariedades. |
| Keywords: | Export Dynamics, Integer Programming Problem, Deep Free Trade Agreements, Dinámica de exportación, Problema de programación integral, Acuerdos comerciales profundos |
| JEL: | F12 F13 F14 |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:apk:doctra:2306 |
| By: | Toshihiro Okubo (Keio University and PRI); Akira Sasahara (Keio University and PRI) |
| Abstract: | This study investigates the impact of the closure of Japan's major international port on firm export behavior. In 2018, Typhoon Jebi directly struck Kansai International Airport (KIX), caused a two-week shutdown of the airport. Utilizing this event as a natural experiment, we examine the stability of logistic infrastructure achieved through the diversion of air exports to other airports, as well as the sectoral heterogeneity of this response. We find that the airport closure resulted in a diversion of exports to other airports, leading to a decline in total air exports only during the week of the typhoon's impact. While exports through non-KIX airports increased, these effects persisted for five to nine weeks. The extent of trade diversion was smaller in the machinery and transport equipment sectors. Our findings suggest that the disruption caused by a temporary airport closure can have substantial short-term impacts but does not result in permanent or long-lasting effects. |
| Keywords: | Natural disaster, exports, transportation, airport closure, Japan |
| JEL: | F14 R41 N75 |
| Date: | 2025–07–08 |
| URL: | https://d.repec.org/n?u=RePEc:keo:dpaper:dp2025-014 |
| By: | Dibiasi, Andreas; Erhardt, Katharina |
| Abstract: | This paper studies heterogeneous firm responses to a sudden trade-induced profitability shock - the 2015 Swiss franc appreciation. Using firm-level investment data and a novel measure of exposure, we document that this trade shock causes large and persistent investment declines among affected firms. Examining heterogeneous responses among firms with similar exposure, we find that differences in responsiveness are not explained by economic fundamentals but are strongly linked to firm age and managerial experience. Younger firms and those led by less experienced managers react substantially more strongly. We argue that these empirical patterns are consistent with a model of Bayesian learning, in which firms update their beliefs about profitability over time. The results provide important insights into the long-lasting effects of trade shocks on business dynamism, capital investment, and local employment. |
| Keywords: | Trade shocks, Firm-level investment, Exchange rate shocks |
| JEL: | F14 D22 G31 L25 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:dicedp:324872 |
| By: | Thierry Warin |
| Abstract: | This paper examines the often-invoked principle that diversifying international trade partners reduces economic risk, and argues that an uncritical application of this concept at the country level can be misleading. Using historical context and a simple theoretical model, we show that while spreading trade across many countries – akin to portfolio diversification – can mitigate idiosyncratic shocks, it provides little protection against systemic shocks and can mask dangerous concentrations at the firm and supply chain levels. Key insights include: (1) Countries do not trade; firms do – and export flows are often dominated by a small number of firms or commodities, so national diversification statistics may conceal micro-level vulnerabilities. (2) Simply increasing the number of trade partners yields diminishing returns in risk reduction, especially when partners’ economies are correlated; more partners do not automatically mean less exposure. (3) A diversified macro-level trade profile does not ensure that individual firms or industries are diversified or resilient. We formalize these ideas in a mean–variance portfolio framework and illustrate how true risk reduction depends on having independent streams of trade (not merely multiple streams). Policymakers are cautioned to look beyond aggregate metrics: without examining who trades what with whom, efforts to diversify trade can create a false sense of security – a phenomenon akin to “diworsification” in finance. The paper concludes by suggesting a multi-level approach to trade diversification that emphasizes firm-level and supply-chain considerations for genuine economic resilience. Cet article examine le principe souvent invoqué selon lequel la diversification des partenaires commerciaux internationaux réduit le risque économique, et soutient qu'une application non critique de ce concept à l'échelle nationale peut être trompeuse. En utilisant le contexte historique et un modèle théorique simple, nous montrons que si la répartition des échanges commerciaux entre de nombreux pays – comparable à la diversification de portefeuille – peut atténuer les chocs idiosyncratiques, elle offre peu de protection contre les chocs systémiques et peut masquer des concentrations dangereuses au niveau des entreprises et de la chaîne d'approvisionnement. Les principaux enseignements sont les suivants : (1) Les pays ne commercent pas ; ce sont les entreprises qui le font ; et les flux d'exportation sont souvent dominés par un petit nombre d'entreprises ou de matières premières, de sorte que les statistiques nationales de diversification peuvent masquer des vulnérabilités au niveau microéconomique. (2) La simple augmentation du nombre de partenaires commerciaux produit des rendements décroissants en termes de réduction du risque, en particulier lorsque les économies des partenaires sont corrélées ; un plus grand nombre de partenaires ne signifie pas automatiquement une exposition moindre. (3) Un profil commercial diversifié au niveau macroéconomique ne garantit pas la diversification ou la résilience des entreprises ou des secteurs individuels. Nous formalisons ces idées dans un cadre de portefeuille moyenne-variance et illustrons comment une véritable réduction du risque dépend de l'existence de flux commerciaux indépendants (et non pas simplement de flux multiples). Les décideurs politiques sont invités à regarder au-delà des indicateurs agrégés : sans examiner qui échange quoi avec qui, les efforts de diversification des échanges peuvent créer un faux sentiment de sécurité – un phénomène comparable à la « diworsification » en finance. L’article conclut en suggérant une approche multi-niveaux de la diversification des échanges, qui met l’accent sur les considérations au niveau de l’entreprise et de la chaîne d’approvisionnement pour une véritable résilience économique. |
| Keywords: | trade diversification, firm-level risk, global value chains, supply chain resilience, Herfindahl-Hirschman index, diversification des échanges commerciaux, risque au niveau des entreprises, chaînes de valeur mondiales, résilience de la chaîne d’approvisionnement, indice de Herfindahl-Hirschman |
| Date: | 2025–09–02 |
| URL: | https://d.repec.org/n?u=RePEc:cir:cirwor:2025s-24 |
| By: | Alonso Alfaro-Ureña (Department of Economic Research, Central Bank of Costa Rica); Benjamin Faber (University of California, Berkely); Cecile Gaubert (University of California, Berkely); Isabela Manelici (London School of Economics); José Pablo Vásquez-Carvajal (London School of Economics) |
| Abstract: | Multinational enterprises (MNEs) increasingly impose “Responsible Sourcing” (RS) standards on their suppliers worldwide, including requirements on worker compensation, benefits and working conditions. Are these policies just “hot air” or do they impact exposed suppliers and their workers? What is the welfare incidence of RS in sourcing countries? To answer these questions, we develop a quantitative general equilibrium (GE) model of RS and combine it with a unique new database. In the theory, we show that the welfare implications of RS are ambiguous, depending on an interplay between what is akin to an export tax (+) and a labor market distortion (−). Empirically, we combine the near-universe of RS rollouts by MNE subsidiaries in Costa Rica since 2009 with firm-to-firm transactions and matched employeremployee microdata. We find that RS rollouts lead to significant reductions in firm sales and employment at exposed suppliers, an increase in their salaries to initially low-wage workers and a reduction in their low-wage employment share. We then use the estimated effects and the microdata to calibrate the model and quantify GE counterfactuals. We find that while MNE RS policies have led to significant gains among the roughly one third of low-wage workers employed at exposed suppliers ex ante, the majority of low-wage workers lose due to adverse indirect effects on their wages and the domestic price index.. ***Resumen: Cada vez es más común que empresas multinacionales (CMNs) imponganestándares de "Abastecimiento Responsable" (AR) a sus proveedores en todo el mundo, tales como requisitos sobre la retribución de los trabajadores, los beneficios y las condiciones laborales que le proporcionan a sus trabajadores. ¿Estas políticas son simplemente "palabras vacías" o tienen un impacto en los proveedores expuestos y sus trabajadores? ¿Cuál es la incidencia en el bienestar de AR en los países de abastecimiento? Para responder a estas preguntas, desarrollamos un modelo cuantitativo de equilibrio general de AR y lo combinamos con una base de datos única y reciente. En la teoría, mostramos que las implicaciones para el bienestar de AR son ambiguas, dependiendo de una interacción entre lo que es similar a un impuesto a la exportación (+) y una distorsión en el mercado laboral (-). Empíricamente, combinamos la casi totalidad de despliegue de códigos de AR por parte de filiales de CMNs en Costa Rica, del 2009 al 2019, con transacciones de empresa a empresa y con los microdatos de las empresas con sus respectivos empleados. Descubrimos que la implementación de AR conduce a reducciones significativas en las ventas de las empresas y en el empleo en los proveedores expuestos, un aumento en los salarios de los trabajadores inicialmente de bajos ingresos y una disminución en la proporción de empleo de bajos salarios. Luego, utilizamos los efectos estimados y los microdatos para calibrar el modelo y cuantificar contrafactuales de equilibrio general. Descubrimos que si bien las políticas de AR de las CMNs han generado ex ante ganancias significativas entre aproximadamente un tercio de los trabajadores de bajos salarios empleados en los proveedores expuestos, la mayoría de los trabajadores de bajos salarios pierden debido a efectos indirectos adversos en sus salarios y en el índice de precios domésticos. |
| Keywords: | Multinationals, Welfare Incidence, Inequality, Labor Market, Multinacionales, Incidencia de bienestar, Inequidad, Mercado laboral. |
| JEL: | F15 F63 O24 |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:apk:doctra:2305 |
| By: | Neave O'Clery; Ben Radcliffe-Brown; Thomas Spencer; Daniel Tarling-Hunter |
| Abstract: | Critical for policy-making and business operations, the study of global supply chains has been severely hampered by a lack of detailed data. Here we harness global firm-level transaction data covering 20m global firms, and 1 billion cross-border transactions, to infer key inputs for over 1200 products. Transforming this data to a directed network, we find that products are clustered into three large groups including textiles, chemicals and food, and machinery and metals. European industrial nations and China dominate critical intermediate products in the network such as metals, common components and tools, while industrial complexity is correlated with embeddedness in densely connected supply chains. To validate the network, we find structural similarities with two alternative product networks, one generated via LLM queries and the other derived by NAFTA to track product origins. We further detect linkages between products identified in manually mapped single sector supply chains, including electric vehicle batteries and semi-conductors. Finally, metrics derived from network structure capturing both forward and backward linkages are able to predict country-product diversification patterns with high accuracy. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.12315 |
| By: | Philippe Andrade; Alexander Dietrich; Sophie Handley; John Leer; Raphael Schoenle; Jenny Tang; Egon Zakrajšek |
| Abstract: | A large body of research demonstrates that uncertainty affects many dimensions of firms’ decisions, from investment and hiring to pricing and profitability. To gain a better understanding of how uncertainty induced by shifting trade policy shapes the behavior of small and medium-sized businesses (SMBs) the authors surveyed decision-makers at SMBs. The survey, administered by Morning Consult, was conducted in three waves: in December 2024, February 2025, and late April 2025. Each wave contained a nationally representative sample of about 600 SMBs. |
| Keywords: | business expectations; surveys; tariffs; uncertainty |
| JEL: | F13 F40 D22 D81 C83 |
| Date: | 2025–09–05 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedbcq:101698 |