I am professor of economics at Heinrich Heine University Düsseldorf and the Düsseldorf Institute for Competition Economics (DICE). I am also a research affiliate at CESifo.

My research focuses on international economics, trade, and trade policy. I am particularly interested in understanding firm-level heterogeneity as a driver of international trade and firm behavior in the context of international trade.

You can find my CV here.

erhardt@dice.hhu.de


Publications

[Media Coverage: NZZ am Sonntag, L'AGEFI, RTS, 20 Minutes]

[Best Paper Award at the 18th GEP/CEPR Annual Postgraduate Conference, Best Paper Award at the Annual Congress of the SSES 2019]







Chapters in books

Working Papers


[CESifo Working Paper 9111]


Abstract: Production processes are increasingly organized in international value-chain networks. The involved firms can be operating at arm's length or be vertically integrated. Both the incidence and the direction of integration (backward or forward in the value chain) depend on specific characteristics of the firms and their economic environment. We propose a simple model of vertical integration in a supplier-producer relationship that is rooted in the property-rights theory to learn about the determinants of forward versus backward integrations. Generally, the profitability and direction of integration depend on the relative investment intensity of the producer and the supplier so as to align investment incentives and maximize joint surplus. Moreover, the organizational form depends on the fixed costs of firm integration and the market environment in the input market as well as the relative importance of the specific input for the final output. These results are strongly confirmed in a large panel of worldwide directed ownership linkages.

[CEPR Discussion Paper 13602] [VOX EU Blog Post]


Abstract: Structural quantitative work in international economics typically models trade costs as a log-linear function of exogenous trade-policy variables. We propose a structural approach that allows for a non-parametric relationship and for treating tariff and non-tariff trade-policy variables as potentially endogenous. The data reject the assumption of log-linearity of trade costs in both tariff- and non-tariff-policy variables. We assess the effects of a unilateral increase of US tariffs on Chinese imports by 10 percentage points and document that the estimated effects on real bilateral trade-flow changes would be largely underestimated by standard approaches.

[CEPR Discussion Paper 15160]


Abstract: We use firm-level data for 15 countries and 13 manufacturing sectors to estimate firm-level productivity parameters and to establish representative country-sector-specific empirical productivity distributions. We use these distributions against the backdrop of multi-sector versions of the models of Eaton and Kortum (2002) and Melitz (2003) to quantify the role of technology in shaping international trade flows. We find that, on average, absolute advantage measured as productivity differences across countries within sectors explains 15% and 21% of total variation in bilateral trade shares in the models of Eaton and Kortum (2002) and Melitz (2003), respectively. In contrast, on average, comparative advantage measured as productivity differences across sectors within countries explains 39% and 47% of variation in trade flows in these two models. We also demonstrate that empirical productivity distributions entail quantitatively important micro-to-macro implications for marginal responses of trade flows to changes in trade costs, for gravity-type estimation of trade models, and comparative statics isomorphism between the customarily parameterized models of international trade. We confirm the predictions of the two aforementioned models under empirical productivity distributions in the data.



Work in progress


Abstract: This paper studies the heterogeneous responses of workers to the large and sudden appreciation of the Swiss Franc in January 2015. To that end, we combine detailed firm-level information on exports and imports with a monthly panel of employees linked to their respective employers. We exploit the varying degrees of trade exposure of Swiss firms to identify the causal effect of the exchange rate shock on adjustment strategies, employment and wages. We show that worker heterogeneity plays an important role for adjustment strategies. Workers who are – a priori – equally exposed to trade are affected differently by the exchange rate. As a result, different workers are able to mitigate adverse effects to different degrees. Our findings shed new light on the unequal consequences of trade shocks and the role of adjustment strategies for aggregate income inequality.
Abstract: We develop a dynamic general equilibrium trade model in which firms choose where to open (keep, or close) job positions, and workers choose where to locate and seeking for a job position to fill. As a result, the economy is a collection of spatially separated labor markets and both the number of jobs and their composition (by sector and occupation types) evolve over time. Households are heterogeneous in various dimensions: in the type of job that they provide labor for, and in how flexible they are when changing region, sector and job characteristics. Changing job characteristics is costly, in the same way for comparable households. We follow Caliendo et al. (2018) in modeling how households choose in which location seeking for jobs. We extend their setup to allow for households of different age, as proposed in Artuc et al. (2010). Realized shocks to fundamentals as well as changes in expectations about future shocks will affect heterogeneous agents differently, with some agents being trapped in their current location, thus being unable to adequately adapt to changes in fundamentals.