Doctoral Seminar: Empirical Trade
Graduate Institute of International and Development Studies
EI007 - Spring 2015- Seminar - 6 ECTS
Tuesdays 16:15-18:00, Room S1
Professor: Nicolas Berman (nicolas.berman – at – graduateinstitute.ch)
Office hours: mondays 16:00-18:00
External speaker: Marco Fugazza (UNCTAD)
Course Description
This seminar is for PhD students focusing on trade and development issues. It is intended to provide support for research, by bringing students up to date with current empirical work in international trade. After a review of the main empirical methods used in international trade, the seminar will discuss various topics in trade and development, including: trade and firm-level productivity; trade, finance and institutions; effects of trade on labor markets and poverty; multinational firms and FDI. The course will feature interventions by external specialists working on trade and development issues in International Organizations, as well in-class presentations and discussions of recent research in international trade. By the end of the course, it is hoped that participants will be able to identify and implement the most appropriate empirical strategy to investigate specific trade and development related issues.
The course will feature a couple of lectures by Marco Fugazza (marco.fugazza@unige.ch), who is a specialist of trade and development and works at UNCTAD.
Pre-requisite
The course does not follow any existing textbook and is open to students with an advanced background in international economics and econometrics. Knowledge of graduate level trade theory is assumed (e.g. Doctoral Seminar: Micro I, by R. Baldwin). Active participation in class is expected.
Structure of the course and assignments
The course assignments have accordingly been designed to help students learn to read papers critically, as well as to develop and execute your own independent research ideas. The first half of the course will contain lectures on topics in international trade and development (see preliminary schedule below). The half will contain presentations and discussions of recent research. Students will also have to handle a short applied research work (individual or in group, depending on the total number of participants). Various datasets should be made available during the course. There will be no midterm or final exam: the grade will be a combination of the presentations, discussions in class and of the empirical work.
Outline (preliminary)
Feb 17 Introduction: firms in international trade
Feb 24-Mar 3 Gravity equations
Mar 10 Tests of comparative advantage theories
Mar 17-24 Trade, productivity and growth
Mar 31-Apr 14 Trade, labor markets and poverty (w/ M. Fugazza)
April 21-May 12 Other topics
May Presentation applied work
Some links to find easily trade data
How to write a good job market paper? See Donald Davis advice
How to present results, write an introduction, do empirical research? See Keith Head website
Links to papers presentation here
Lectures
Week 1: Introduction: Firms in international trade, recent evidence
Week 2-3: Gravity Equations: Theory and Estimation
Some slides on Helpman, Melitz, Rubinstein methodology, and the heteroscedasticity problem
Readings: Head and Mayer (2013) "Gravity equations: workhorse, toolkit, cookbook", CEPR DP 9322
See also the associated webpage
Additional: Anderson and Van Wincoop (2003), Santos Silva and Tenreyro (2006)
Two literature reviews on gravity equations: Bergstrand and Egger, Anderson
Potential papers for presentations:
- Helpman, Melitz, Rubinstein (2008) “Trading Partners and Trade Volumes”, QJE
- Anderson and Van Wincoop (2003). “Gravity with Gravitas: A solution to the Border Effect Puzzle”, AER
- Santos Silva, J.M.C. and S. Tenreyro (2006), “The Log of Gravity”, RESTAT
- Anderson and Yotov, "The changing incidence of geography", AER 2010
- Baier and Bergstrand, "Bonus Vetus OLS: A Simple Method for Approximating International Trade-Cost Effects using the Gravity Equation", JIE 2009
- Crozet and Koenig "Structural gravity with extensive and intensive margins of trade", CJE 2010
Week 4: Tests of comparative advantage theories
Related papers:
- D. Bernhofen and J. Brown (2004), “A direct test of the theory of comparative advantage: the case of Japan”, JPE
- A. Costinot and D. Donaldson (2012), “Ricardo’s theory of comparative advantage: old idea, new evidence”, AER Papers and Proceedings
- Costinot, Donaldson and Smith (2014). Evolving Comparative Advantage and the Impact of Climate Change in Agricultural Markets: Evidence from 1.7 Million Fields around the Earth, JPE
- Trefler, D. “The case of the missing trade and other HOV mysteries,” AER 1995.
- Harrigan J. (1997), Technology, Factor Supplies, and International, Specialization: Estimating the Neoclassical Model, AER
- Lai H. and Zhu S. (2007), “Technology, endowments, and the factor content of bilateral”, JIE
- Choi and Krishna (2004) “The factor content of Bilateral Trade: An Empirical Test”, JPE
Weeks 5/6: Trade and the labor market (w/ Marco Fugazza)
Potential papers for presentations:
- Autor, Dorn, Hanson, Song (2014) “Trade adjustment: worker-level evidence”, forth. QJE
- Autor, Dorn and Hanson (2012) The China Syndrome: Local Labor Market Effects of Import Competition in the United States, AER
- Amiti, M. and R. Davis (2012), "Firms, Trade and wages: Theory and Evidence", ReStud
Weeks 7/8: Trade and growth: macro and micro-level evidence
Macro-level Slides
Firm-level Slides
Some slides on TFP computation and Learning-by-exporting
Potential papers for presentations:
- Feyrer (2011), "Distance, Trade and Income - the 1967 to 1975 closing of the Suez canal as a natural experiment"
- Feyrer (2009), "Trade and income: exploiting time series in geography"
- Lileeva and Trefler, “Improved Foreign Market Access Raises Plant-Level Productivity … For Some Plants », QJE
- Goldberg, Khandelwal, Pavcnik, Topalova, "Importer intermediate inputs and domestic product growth: evidence from India", QJE
- Pavcnik, (2002). "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants," ReStud
- Amiti and Konings (2007), "Trade liberalization, intermediate inputs and firm productivity: evidence from Indonesia", AER
- De Loecker (2013), "Detecting Learning by exporting", AEJ-Macro
- De Loecker (2007). "Do Exports Generate Higher Productivity? Evidence from Slovenia,"JIE
Week 9: Trade and finance
Potential papers for presentations:
- Amiti and Weinstein (2011), "Exports and financial shocks
- Manova, Kalina (2007). "Credit Constraints, Heterogeneous Firms andInternational Trade," Restud
- Antras and Foley (2014) "Poultry in motion: a study of international trade finance practices", JPE
Week 13: Trade and war
Potential papers for presentations:
- Martin, Mayer, Thoenig (2008), "Make Trade not War", ReStud
- Martin, Mayer, Thoenig, (2012), "The geography of conflicts and regional trade agreements", AEJ-Macro
- Jha (2012), "Trade, institutions and ethnic tolerance: evidence from South Asia", mimeo
Weeks 10-12: Other topics
Potential topics and papers for presentations
Trade, Quality and Multi-products firms
Trade and Quality (some slides)
Multi-product firms (some slides)
- Hummels and Skiba “Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture ”, JPE
- Amiti and Khandelwal (2011), "Import competition and quality upgrading", ReStat
- Crozet Head and Mayer (2012), “Quality sorting and trade:Firm-level evidence for French wine”, Restud 2012
- Khandelwal (2010) “The long and short (of) quality ladders”, Restud
- Manova and Zhang (2012), "Export prices across firms and destinations", QJE
- Mayer, Melitz and Ottaviano (2011) "Market size, competition and the product mix of exporters", AER
- Bernard, Andrew, Stephen Redding and Peter Schott (2006a). "Multi-Product Firms and Product Switching," AER.
New Economic Geography
Some slides
- Redding and Sturm (2008) The Costs of Remoteness: Evidence from German Division and Reunification", AER
- Davis and Weinstein (2002). “Bones, Bombs and Break Points: The Geography of Economic Activity”, AER
- Handbury and Weinstein (2011), "Is new economic geography right? Evidence from price data", NBER WP
- Brülhart, Carrère, Trionfetti (2012), "How wages and employment adjust to trade liberalization: quasi experimental evidence from Austria", JIE
Imperfect contracts, institutions and trade
- Alfaro et al "Trade policy and firm boundaries", NBER WP 2010
- Levchenko, Andrei (2007). "Institutional Quality and International Trade," Review of Economic Studies, 74(3), p.791-819.
- Nunn, Nathan (2007). "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade," Quarterly Journal of Economics, 122(2), p.569-600.
- Berkowitz,, Moenius and Pistor (2006). "Trade, Law and Product Complexity," Review of Economics and Statistics, 88(2), p.363-373.
Past years' topics
Trade and labor (some slides)
Extented reading list
Gravity equations
- Helpman, Melitz, Rubinstein (2008) “Trading Partners and Trade Volumes”, QJE
- Anderson and Van Wincoop (2003). “Gravity with Gravitas: A solution to the Border Effect Puzzle”, AER
- Anderson and Yotov, "The changing incidence of geography", AER 2010
- Waugh, "International Trade and Income differences" AER 2010
- Disdier, A. and K. Head (2008), “The Puzzling Persistence of the Distance Effect on Bilateral Trade”, RIESTAT 90, 37-48.
- Head, Mayer and Ries (2010), “The erosion of colonial trade linkage after independance”, JIE
- Santos Silva, J.M.C. and S. Tenreyro (2006), “The Log of Gravity”, RESTAT
Economic Geography
- Redding and Sturm (2008) The Costs of Remoteness: Evidence from German Division and Reunification", American Economic Review, 98(5), 1766-1797, 2008
- Davis and Weinstein (2002). “Bones, Bombs and Break Points: The Geography of Economic Activity”, AER
- Duranton, G. and H.G. Overman (2005), “Testing for Localisation Using Micro-Geographic Data”, RES 72, 1077-1106
- Hanson (2005), “Market Potential, Increasing Return and Geographic Concentration”, JIE
- Head, K., and T. Mayer (2004), “Market Potential and the Location of Japanese Firms in the European Union'', RIESTAT
- Redding and Venables (2004). “Economic Geography and International Inequality”, JIE
Firm Heterogeneity: Productivity and Trade
- Lileeva and Trefler, “Improved Foreign Market Access Raises Plant-Level Productivity … For Some Plants », QJE
- Pavcnik, Nina (2002). "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants," The Review of Economic Studies, 69, January, p.245-76.
- De Loecker, Jan (2007). "Do Exports Generate Higher Productivity? Evidence from Slovenia," Journal of International Economics, 73.
- Eaton, Jonathan, Samuel Kortum and Francis Kramarz (2008). "An Anatomy of International Trade: Evidence from French Firms," Econometrica
- Albornoz, Calvo Corcos and Ornelas (2009) « Sequential Exporting », mimeo
- Arkolakis and Muendler (2010), The extensive margin of exporting product: a firm level analysis, NBER WP
- Bernard, Andrew, Bradford Jensen and Peter Schott (2007). "Importers, Exporters, and Multinationals: A Portrait of Firms in the U.S. that Trade Goods," NBER WP
- Bernard, Andrew, Bradford Jensen and Peter Schott (2006). "Trade Costs, Firms and Productivity," Journal of Monetary Economics, 53(5), p.917-937.
- Bernard and Jensen (1995). "Exporters, Jobs and Wages in U.S. Manufacturing, 1976-1987," Brookings Papers on Economic Activity: Microeconomics.
- Eaton Jonathan, Samuel Kortum and Francis Kramarz (2004b). "Dissecting Trade: Firms, Industries, and Export Destinations," American Economic Review P&P, 94, p.150-154. - Goldberg et al (2010), "Imported intermediate inputs and domestic product growth: Evidence from India", QJE
- Bernard, Andrew and Bradford Jensen (1999). "Exceptional Exporter Performance: Cause, Effect, or Both?" Journal of International Economics, 47(1), p.1-25.
- Aw, B.Y., S. Chung and M.J. Roberts (2000). "Productivity and Turnover in the Export Market: Micro-level Evidence from the Republic of Korea and Taiwan(China)," World Bank Economic Review, 14(1), p.65-90.
- Clerides, S., S. Lach and J. Tybout (1998). "Is Learning by Exporting Important? Micro-dynamic Evidence from Colombia, Mexico, and Morocco," Quarterly Journal of Economics, 113 (3), p.903-47.
- Aghion, P., R. Burgess, S. Redding, and F. Zilibotti, 2003. "The Unequal Effects of Liberalization: Theory and Evidence from India," Harvard University, Department of Economics.
- De Loecker (2009), "Product Differentiation, Multi-Product Firms and Estimating the Impact of Trade Liberalization on Productivity," NBER WP # 1315
- Van Biesebroeck (2003) “Exporting Raises Productivity in Sub-Saharan African Manufacturing Plants”, NBER Working Paper No. 10020
- Eaton, Jonathan, Marcela Eslava, Maurice Kugler and James Tybout (2008). "The Margins of Entry into Exports Markets: Evidence from Columbia," in E. Helpman, D. Marin and T. Verdier, eds., The Organization of Firms in a Global Economy, forthcoming, Harvard University Press.
Firm Heterogeneity: Country-level Evidence
- Broda, Christian and David Weinstein (2006). “Globalization and the Gains from Variety,” Quarterly Journal of Economics 121(2).
- Hummels, David and Peter Klenow (2005). “The Variety and Quality of a Nation’s Exports,” American Economic Review 95, p.704-723.
- Tybout, James (2001), .Plant- and Firm-level Evidence on the New trade Theories (in E. Kwan Choi and James Harrigan, ed., Handbook of International Trade, Oxford: Basil-Blackwell, 2003, and NBER Working Paper No. 8418).
Trade and Labor Market Outcomes
- Artuç Erhan, Shubham Chaudhuri and John McLaren, 2010. Trade shocks and labor adjustment: a structural empirical approach. American Economic Review 100(3), 1008-1045.
- Autor, David, David Dorn and Gordon Hanson, 2013. The China Syndrome: Local Labor Market Effects of Import Competition in the United States. American Economic Review, forthcoming.
- Brecher, Richard, 1974. Minimum Wage Rates and the Pure Theory of International Trade. Quarterly Journal of Economics 88, 98-116.
- Costinot, Arnaud, 2009. Jobs, jobs, jobs: a “new” perspective on protectionism. Journal of the European Economic Association 7(5), 1011-1041.
- Currie, Janet, and Anne Harrison, 1997. Sharing the Costs: The Impact of Trade Reform on Capital and Labor in Morocco. Journal of Labor Economics 15(3), S44-71.
- Davidson, Carl, Lawrence Martin and Stephen Matusz, 1999. Trade and Search Generated Unemployment. Journal of International Economics 48(2), 271-99.
- Davis, Donald R and James Harrigan, 2011. Good jobs, bad jobs, and trade liberalization. Journal of International Economics 84(1), 26-36.
- Dutt, P., Devashish Mitra and Priya Ranjan, 2010. International Trade and Unemployment: Theory and Cross-National Evidence. Journal of International Economics.
- Egger, Hartmut and Udo Kreickemeier, 2009. Firm Heterogeneity and the Labor Market Effects of Trade Liberalization. International Economic Review 50(1), 187-216.
- Goldberg, Pinelopi, and Nina Pavcnik, Nina, 2005. Trade, wages, and the political economy of trade protection: evidence from the Colombian trade reforms. Journal of International Economics 66(1), 75-105.
- Hasan, Rana, Devashish Mitra, Priya Ranjan and Reshad Ahsan, 2011. Trade Liberalization and Unemployment: Theory and Evidence from India. Journal of Development Economics 97(2), 269-280.
- Helpman, Elhanan and Oleg Itskhoki, 2010. Labor Market Rigidities, Trade and Unemployment. Review of Economic Studies 77 (3), 1100-1137.
- Hoekman, Bernard and Alan Winters, 2005. Trade and Employment: Stylized Facts and Research Findings. Policy Research Working Paper #3676, The World Bank.
- Krugman, Paul, 1992. What Do Undergrads Need to Know About Trade? American Economic Review 83(2), 23-26.
- Levinsohn, Jim, 1999. Employment responses to international liberalization in Chile. Journal of International Economics 47(2), 321-344.
- Menezes-Filho, Na´ercio and Marc-Andreas Muendler, 2011. Labor reallocation in response to trade reforms. NBER working paper 17372.
- Pierce, Justin and Peter Schott, 2013. The Surprisingly Swift Decline of US Manufacturing Employment. mimeo, Yale University.
- Revenga, Ana, 1997. Employment and Wage Effects of Trade Liberalization: The Case of Mexican Manufacturing. Journal of Labor Economics 15(S3), S20-S43.
Trade and Poverty
- Acosta P. and Gasparini L., 2007. “Capital Accumulation, Trade Liberalization, and Rising Wage Inequality: The Case of Argentina”, Economic Development and Cultural Change, Vol. 55, No. 4 (July 2007), pp. 793-812
- Aghion, P. and P. Howitt (1992), A Model of Growth Through Creative Destruction", Econometrica, 60(2), pp. 323-351.
- Attanasio, O., P. Goldberg and N. Pavcnik (2004), Trade Reforms and Wage Inequality in Colombia, Journal of Development Economics, 74, pp. 331-366.
- Berman, E., J. Bound and Z. Griliches (1993), Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing, NBER Working Paper 4255.
- Biscourp, P. And F. Kramarz (2007), Employment, Skill Structure and International Trade: Firm-level Evidence for France”, Journal of International Economics, 72, pp. 22-51.
- Borjas, G., R. Freeman, L. Katz, J. DiNardo and J. Abowd (1997), How Much do Immigration and Trade Affect Labor Market Outcomes?, Brookings Papers on Economic Activity, 1997(1), pp. 1-90.
- Dollar, D. (2005), Globalization, Poverty, and Inequality since 1980, International Bank for Reconstruction and Development/The World bank.
- Feenstra, R. and G. Hanson (1996), Globalization, Outsourcing, and Wage Inequality, American Economic Review, 86(2), 240-245.
- Feenstra, R. and G. Hanson (1999), The Impact of Outsourcing and High-Technology Capital on Wages: Estimates for the United States, 1979-1990, Quarterly Journal of Economics, 114(3), pp. 907-940.
- Ferreira, F. H. G. and Ravallion M.. 2008. “Global Poverty and Inequality: A Review of the Evidence.” Policy Research Working Paper 4623. The World Bank, Development Research Group Poverty Team, May.
Galiani, S. and Sanguinetti, P., 2003. "The impact of trade liberalization on wage inequality: evidence from Argentina," Journal of Development Economics, Elsevier, vol. 72(2), pages 497-513, December.
Haughton, J. and Shahidur R. K., 2009. Handbook on Poverty and Inequality,
World Bank; chapters 1-6.
- Goldberg, P. and N. Pavcnik (2007), Distributional Effects of Globalization in Developing Countries, Journal of Economic Literature, XLV, pp. 39-82.
- Grossman, G. and E. Rossi-Hansberg (2008), Trading Tasks: A Simple Theory of Offshoring, American Economic Review, 98(5), pp. 1978-1997.
- Krugman, P. (2007), Trade and Inequality, Revisited, Vox-EU.
- Lawrence, R. and M. Slaughter (1993), International Trade and American Wages in the 1980s: Giant Sucking Sound or Small Hiccup?, Brookings Papers on Economic Activity. Microeconomics, 1993(2), pp. 161-226.
Porto, G, 2003. “Trade Reforms, Market Access and Poverty in Argentina” Policy Research Working Paper. The World Bank.
- Thoenig, M. and T. Verdier (2003), A Theory of Defensive Skill-Biased Innovation and Globalization, American Economic Review, 93(3), pp. 709-728.
- Verhoogen, Eric (2004). "Trade, Quality Upgrading and Wage Inequality in the Mexican Manufacturing Sector: Theory and Evidence from an Exchange-Rate Shock," QJE
- Wood, A. (1997), Openness and Wage Inequality in Developing Countries: The Latin American Challenge to East Asian Conventional Wisdom. World Bank Economic Review, 11(1), pp. 33-57.
- Trefler (2004) “The short and the long run of the Canda-US Free Trade Agreement”, AER
- Bustos, Paula (2006). "Rising Wage Inequality in the Argentinean Manufacturing Sector: The Impact of Trade and Foreign Investment on Technology and Skill Upgrading," CREI mimeo.
- Bas, Maria (2008) “Trade, technology adoption and wage inequality: theory and evidence”, LSE WP
FDI, Trade and MNCs
- Blomstrom (Eds.), Does Foreign Direct Investment Promote Development? Washington, DC: Institute for International Economics.
- Baltagi, B.H., Egger, P., Pfaffermayr, M., 2008. Estimating regional trade agreement effects on FDI in an interdependent world. Journal of Econometrics 145, 194–208.
- Aitken and Harrison (1999), "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela", American Economic Review, 89(3), pp. 605-618.
- Arnold J. and Javorcik, B. (2009), "Gifted Kids or Pushy Parents? Foreign Acquisitions and Plant Productivity in Indonesia", Journal of International Economics, 79, pp. 42-53.
- Feenstra, Robert and Gordon Hanson, 1997. Foreign Direct Investment and Relative Wages: Evidence from Mexico’s Maquiladoras. Journal of International Economics 42(3/4), 371-393.
- Javorcik (2004), "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers through Backward Linkages", American Economic Review, 94(3), pp. 605-627.
- Krishna, K., A. Ozyildirim and N. Swanson (2003), Trade, Investment and Growth: Nexus, Analysis and Prognosis, Journal of Development Economics, 70(2), pp. 479-499.
- Head, K., Mayer, T., 2004. Market potential and the location of Japanese investment in the European union. Review of Economics and Statistics 86 (4), 959–972.
- UNCTAD (2013), World Investment Report, Geneva.
- Warcziarg, R. (2001), Measuring the Dynamic Gains from trade, World Bank Economic Review, 15(3), pp. 393-429.
Sunk Costs
- Roberts, Mark and James Tybout (1997). "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, 87(4), p.545-564.
- Das, Mita, Mark Roberts and James Tybout (2007). "Market Entry Costs, Producer Heterogeneity and Export Dynamics," Econometrica, 75(3).
- Bernard A. and J. B. Jensen (2004). "Why Some Firms Export," The Review of Economics and Statistics, 86(2).
Multiproduct firms, quality
- Hummels and Skiba “Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture ”, JPE
- Mayer, Melitz and Ottaviano (2011) "Market size, competition and the product mix of exporters", AER forthcoming
- Bernard, Andrew, Stephen Redding and Peter Schott (2006a). "Multi-Product Firms and Product Switching," AER.
- Iacovone, Leonardo; Javorcik, Beata S. (2008), "Shipping Good Tequila Out: Investment, Domestic Unit Value and Entry of Multi-Product Plants into Export Markets", mimeo
- Crozet Head and Mayer (2009), “Quality sorting and trade: Firm-level evidence for French wine”,
Imperfect contracts, institutions and trade
- Alfaro et al "Trade policy and firm boundaries", NBER WP 2010
- Nunn, Nathan (2007). "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade," Quarterly Journal of Economics, 122(2), p.569-600.
- Berkowitz,, Moenius and Pistor (2006). "Trade, Law and Product Complexity," Review of Economics and Statistics, 88(2), p.363-373.
- Levchenko, Andrei (2007). "Institutional Quality and International Trade," Review of Economic Studies, 74(3), p.791-819.
Trade and Capital Market Frictions
- Amiti and Weinstein (2011), "Exports and financial shocks
- Manova, Kalina (2007). "Credit Constraints, Heterogeneous Firms andInternational Trade," Restud
- Chor, Davin, Fritz Foley and Kalina Manova (2007). "MNC Activity and Host Country Financial Development," Stanford University mimeo.
- Desai, Mihir, Fritz Foley and Kristin Forbes (2006). "Financial Constraints and Growth: Multinational and Local; Firm Responses to Currency Depreciations," Review of Financial Studies, forthcoming.