Research

PUBLICATIONS

Anyfantaki S., Kalyvitis, S., Katsimi, M. & Thomaidou, E., 2019, Export pricing at the firm level with panel data, In M. Tsionas (Ed.), Panel data econometrics volume 2: empirical applications, Elsevier, ISBN: 9780128158593 

Abstract: This chapter reviews the growing empirical literature that explores the determinants of export prices at the firm level. It first presents evidence from empirical studies that link firm export pricing to destination characteristics (‘gravity-type’ models). The main implications of channels that can generate price differentiation, namely quality customization, variable markups and exchange rate pass-through, and financial frictions are then explored. A newly compiled panel dataset from Greek exporting firms is used to present evidence from regressions with export price as the dependent variable and show how the main economic hypotheses derived in theoretical models are nested in empirical specifications.

WORKING PAPERS

Thomaidou, E. & Kalyvitis, S., Innovation, financial leverage, and export performance

Abstract: We study how innovation shapes export performance at the firm level using a sample of Greek innovative exporters. We show that the positive association between export revenues and innovation only holds for firms with lower financial leverage. We rationalize this pattern with a heterogeneous-firm model in which firms with higher financial leverage face decreased marginal costs. Following a rise in their innovative activities, only firms with leverage below a threshold level export higher-quality products and have higher export revenues.

Thomaidou, E. & Smyrnakis, D., Estimating product quality: a copula approach

Abstract: The main challenge in analysing product quality is that it is unobserved. A common feature in related studies is to employ price-based ad hoc proxies to measure product quality. However, high product prices do not necessarily suggest high product quality. Piveteau and Smagghue (2019) propose a methodology that estimates product quality from the demand side and exploits information coming from the importing activity of exporters to deal with the price endogeneity challenge yet requires extensive disaggregated data. This paper builds upon their work and offers a simple instrument-free demand estimation method to infer product quality using the properties of the Gaussian copula. We use data from Greek exporters spanning from 2002 to 2014 and obtain a less data intensive and robust quality measure at the firm-product level, especially in markets with higher differentiation where product quality is more significant.

Gasiorek, M., Smith, A. & Thomaidou, E., Partial Equilibrium Modelling with Heterogeneous

Firms: A Framework for UK Trade Policy

Abstract: Firm heterogeneity plays an important role in shaping a country's trade dynamics, technological change, and economic growth. Evidence suggests that it is larger and higher-performing firms which typically engage in international trade, contributing to a country’s comparative advantage, while lowerperforming firmsfocus more on domestic markets. In good part this is likely to be driven by differences in costs and scale. Changes in costs of trade thus impact differentially on firms. The aim of this paper is to examine this in the context of a partial equilibrium simulation modelling framework, which allows for firm-level heterogeneity. Building upon existing partial equilibrium modelling, we allow for firm level heterogeneity enabling the modelling of firm entry and exit from domestic and export markets in response to trade policy changes. Despite challenges in endogenous firm modelling, particularly the demand for firm-level data and entry cost metrics, this paper aims to overcome obstacles by implementing the model on real-world data for the UK. The paper aims to illustrate how PE modelling can provide a useful tool for analysing and shaping trade policies, contributing to informed decision-making.

GRANTS

Thomaidou, E., Matching Trademarks and Voluntary Sustainability Standards, British

Academy/Leverhulme Small Research Grants SRG 2023-24