Oscar Perelló

I am a PhD candidate in Economics at University College London (UCL) working on international trade and development.

My research focuses on firm production networks in the presence of market frictions and supply disruptions, and the implications for trade and industrial policy.

You can find my CV here and reach me at oscar.perello.19@ucl.ac.uk

Work in Progress

Trade Intermediaries and Supply Chain Resilience


Trade Intermediation in Global Production Networks

We study the role of trade intermediation for global production networks. Intermediaries carry out indirect transactions between buyers and sellers that shape the structure of production networks and determine the gains from trade. We document novel facts on intermediated trade using data from Chile for the universe of international buyer-seller links and firms' business activity. Contrary to common wisdom, intermediaries are used by sellers of all sizes and the share of intermediated trade is similar for small and large exporters. Moreover, some sellers mix different trade modes across buyers for a given product. We develop a quantifiable model of network formation with two-sided heterogeneity, heterogeneous matching costs, and trade intermediation that rationalizes these patterns. Sellers endogenously select their trade partners and trade mode, while intermediaries reduce relationship-specific costs but capture a share of the trade surplus in each transaction. We find that intermediation widens and deepens production networks and has heterogeneous effects across downstream producers.

We study the role of firm heterogeneity and imperfect competition for global production networks and the gains from trade. We develop a quantifiable trade model with two-sided firm heterogeneity, matching frictions, and oligopolistic competition upstream. More productive downstream buyers endogenously match with more upstream suppliers, thereby inducing tougher competition among them and enjoying superior sourcing outcomes. We then present consistent empirical evidence using highly disaggregated data on firms' production and trade transactions for France, Chile and China. Downstream French and Chilean buyers import higher values and quantities at lower prices as upstream Chinese markets become more competitive over time, with stronger responses by larger buyers. Chinese suppliers set lower prices and mark-ups to buyers that source from more suppliers. Counterfactual analyses indicate that lower barriers to entry upstream, lower matching costs, and lower trade costs amplify firm productivity and aggregate welfare downstream, with differential effects across firms. These effects operate through a combination of improved buyer-seller matches, gains from variety, and lower mark-ups. Global production networks thus generate greater impacts and cross-border spillovers from industrial policy and trade liberalization.

We study the effect of natural resource revenues on public employment and the provision of public goods at the municipal level in Chile. We exploit a novel quasi-experiment: the 2005 legal reform that increased the share of mining patents allocated to municipalities where mines operate from 30 to 50 per cent. Our main result is a significant expansion of municipal employment expenditures in mining municipalities, driven by long-term employment, and an increase in allowances to the municipal council. We did not find a significant impact on health transfers, community programs or municipal investment, while there is a relatively small increase in educational transfers. These results are complemented with evidence of an increase in the probability of re-election of mayors in municipalities that had a large expansion in employment expenditures, linking our findings to the clientelism mechanism of natural resource rents. We discuss implications for the debate on fiscal decentralization in resource-rich economies.