Working Papers
Large Multiproduct Exporters Across Rich and Poor Countries: Theory and Evidence.
May, 2017 (under review)
Online Appendix
Large multiproduct exporters dominate trade flows and their scope decisions have new implications for the welfare gains from trade. Guided by new evidence from the Exporter Dynamics Database, I build a model where consumers have non-homothetic preferences and firms compete oligopolistically. Firms choose their scope depending on the per capita income of the destination and on cannibalization effects. I derive a new formula for the welfare gains from trade that relates the change in the domestic market share of the typical domestic firm to the welfare change due to a reduction in trade costs. Ignoring income or cannibalization effects causes mismeasurement of the US welfare gains by 20%.
Large multiproduct exporters dominate trade flows and their scope decisions have new implications for the welfare gains from trade. Guided by new evidence from the Exporter Dynamics Database, I build a model where consumers have non-homothetic preferences and firms compete oligopolistically. Firms choose their scope depending on the per capita income of the destination and on cannibalization effects. I derive a new formula for the welfare gains from trade that relates the change in the domestic market share of the typical domestic firm to the welfare change due to a reduction in trade costs. Ignoring income or cannibalization effects causes mismeasurement of the US welfare gains by 20%.
Has the Euro Shrunk the Band? Price Convergence in a Currency Union. January, 2018 (under review)
Online Appendix
I study the effects of the European Monetary Union (EMU) on price convergence using monthly disaggregated price indices from 32 European countries from 1999 to 2016. I apply Heckscher's insight that transaction costs create bands of inaction in which price differences are not arbitraged away, and I estimate the bands of inaction using a threshold autoregressive model. My findings suggest that the EMU reduces transaction costs: the bands of inaction between countries in the EMU are 17% lower than the average band. Time series evidence from the entry in the EMU of selected countries further confirms the result.
I study the effects of the European Monetary Union (EMU) on price convergence using monthly disaggregated price indices from 32 European countries from 1999 to 2016. I apply Heckscher's insight that transaction costs create bands of inaction in which price differences are not arbitraged away, and I estimate the bands of inaction using a threshold autoregressive model. My findings suggest that the EMU reduces transaction costs: the bands of inaction between countries in the EMU are 17% lower than the average band. Time series evidence from the entry in the EMU of selected countries further confirms the result.
Flexibility and Productivity Heterogeneity of Multiproduct Exporters. July, 2017 (with Mingzhi Xu)
We document three stylized facts for Chinese exporters that challenge the traditional models of multiproduct firms in which productivity is the only determinant of firm's sales and scope. First, firm-destination specific shocks explain more than 50% of the variation in scope across firms and destinations. Second, there is a disconnect between sales and scope across firms within a destination: for any level of sales, there are several single product firms and few wide-scope firms. Third, the scope of exporters conditional on sales depends on measurable characteristics of firms, such as capital intensity and R&D expenditures. We rationalize the three stylized facts in a model featuring firm heterogeneity in productivity and in flexibility, namely the ability to introduce new varieties in a destination at low costs. Heterogeneity in firm's flexibility explains more than 20% of the total variation in scope across firms and destinations.
Work in Progress
Welfare Effects of International Regulatory Protectionism (with Ariel Weinberger)
Oligopoly and Oligopsony in International Trade (with Vladimir Tyazhelnikov)
Publications
Exchange Rate Devaluation and Reshuffling of Global Jobs (with F. Sdogati). Journal of Economic Integration, 2013; 28(2):241-268. Awarded the Dae-Yang Prize for best article in 2013.
Other work
Published on ISPI (Italian Institute For International Political Studies)
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