Research
Research
Abstract: I study the aggregate surplus effects of input trade liberalization under oligopolistic competition. I use a multi-country model accounting for endogenous sourcing decisions and strategic behavior of heterogeneous firms to quantify the welfare effects of the accession of Ukraine into WTO in 2008 on Ukrainian food-processing sectors. I find that welfare improves slightly under oligopolistic competition, with consumers gaining and firms losing. Endogenous adjustment of sourcing strategies accounts for a quantitatively important fraction of welfare gains. Strategic sourcing and variability in markups both contribute to smaller welfare improvement than under monopolistic competition.
Presented at: 16th FIW Research Conference "International Economics" (WU Vienna, 2024), 17th RGS Doctoral Conference (Universität Duisburg-Essen, 2024), the 25th Workshop "Internationale Wirtschaftsbeziehungen" (Universität Göttingen, 2024), 23rd RIEF Doctoral Meeting (PSL, 2024), 39th ENTER Jamboree (ULB, 2024), 7th Workshop on International Economic Networks (University of Vienna, 2024), 25th European Trade Study Group Conference (Athens University of Economics and Business, 2024), NOITS 2025 (University of Copenhagen)
Financial Frictions, Variable Markups, and Unilateral Trade Liberalization, joint work with Mykola Ryzhenkov
Abstract: We study how earnings-based credit constraints and variable markups shape effects of a unilateral trade liberalization. We develop an open economy dynamic heterogeneous agent model and discipline it using Ukrainian firm-level data. To the best of our knowledge, our model is the first one generating both capital intensity premium of exporters and positive correlation between markups and capital intensities in the steady state in line with the existing empirical evidence. Using counterfactual experiments, we find that trade liberalization comparable to the enactment of Autonomous Trade Preferences (ATP) by the European Union (EU) towards Ukraine in 2014 improves welfare and resource allocation but exacerbates capital misallocation. Better access to earnings-based credit magnifies improvements in welfare and resource allocation, while tougher foreign competition reduces them.
Presented at: 1st JIE Summer School (University of Crete, 2023, Poster), Doctoral Workshop on Quantitative Dynamic Economics (University of Strasbourg, 2023), 6th FHM+ Development Economics Workshop(Frankfurt am Main, 2023), 16th FIW Research Conference "International Economics" (WU Vienna, 2024), the 25th Workshop "Internationale Wirtschaftsbeziehungen" (Universität Göttingen, 2024), First International Virtual Conference on Ukraine (Jönköping International Business School, Sweden, 2024), 25th European Trade Study Group Conference (Athens University of Economics and Business, 2024), NORMAC 2026, NBU Research seminar, University of Hamburg