Advanced ERC Grant 

I have been awarded by the European Research Council (ERC) an Advanced Research Grant of 1,817,096 Euro (Grant No. 834253) to fund a research agenda on “Trade Agreements and Supply Chains” (TRASC).  

This agenda is motivated by two major trends in international trade. The first is the emergence of global supply chains. Technological progress and declining trade barriers have enabled firms to retain within their boundaries – and within their domestic economies – only a subset of production activities. Global supply chains are largely shaped by multinational corporations (MNCs), which dominate trade in both final and intermediate goods.

The second is the proliferation of regional trade agreements (RTAs). More than 350 RTAs are currently in force, with many others under negotiation. Trade agreements have not only increased in number but have also become progressively “deeper”, often encompassing provisions that extend beyond traditional trade policy, including environmental standards, investment rules, and intellectual property rights.

The broad goal of the TRASC research agenda is to develop new theoretical models and use rich new data to address novel and timely questions related to these trends, emphasising the key role played by multinational firms, and the importance of understanding the interplay between economics, law, and politics. The research agenda is organised into two complementary strands, each comprising several projects.

The first strand examines the determinants of global supply chains. Some projects investigate how trade agreements affect firms’ sourcing decisions, productivity, and welfare. A key finding is that free trade agreements – the most common type of RTAs – distort firms’ sourcing decisions through rules of origin, reducing firms’ sales, employment, and productivity. Other projects focus on multinational firms. One shows that input-output linkages strongly predict trade flows between parent companies and their affiliates and documents a high and persistent regional concentration of these flows, consistent with RTAs shaping the organisation of multinational production. Another project studies network effects that extend beyond the boundaries of MNCs: multinational ownership reduces country-specific trade frictions, making it easier for affiliates to export to and import from countries in which their parent company already has a presence.

The second strand examines the political economy of trade policy. Some projects focus on lobbying, showing that lobbying over RTAs is dominated by MNCs, which advocate both the ratification of these agreements and the inclusion of deep provisions that favour their interests. Large, politically connected firms also play a dominant role in lobbying for protectionist measures, such as antidumping duties. Other projects focus on voting, demonstrating that electoral accountability shapes legislators’ support for or opposition to trade agreements. Electoral incentives can also give rise to politically motivated trade barriers, affecting outcomes throughout supply chains, including protected industries as well as downstream and upstream industries.

Projects related to TRASC grant

“Lobbying for Globalisation” (with Michael Blanga-Gubbay and Mathieu Parenti), Economic Journal 135 (2025), 487-518 [Featured article].  Featured in a column on VoxEU and on ProMarket. 

“Trade Protection Along Supply Chains,” (with Chad Bown, Aksel Erbahar, and Lorenzo Trimarchi), forthcoming in the American Economic Journal: Economic Policy. 

“Multinational Networks and Trade Participation” (with Glenn Magerman, Fabrizio Leone, and Catherine Thomas).  CEPR Discussion Paper 20014.  CEPR Discussion Paper 20014 and CESifo Working Paper No. 11740. Revise and Resubmit, Review of Economic Studies.

“Unresponsive or Accountable? Evidence from Representatives’ Votes on Trade Agreements” (with Florin Cucu, Federico Gallina, and Mattia Nardotto), CEPR Discussion Paper DP19609 and CESifo Working Paper WP 11405.  New version!

“Trade Within Multinational Boundaries” (with Laura Alfaro, Fariha Kamal, and Zachary Kroff).  NBER Working Paper 33887, CEPR Discussion Paper 21063 and  CESifo Working Paper No. 12394. New version!

“The Trade-Distorting Effects of Rules of Origin: A Firm-Level Analysis” (with Federico Gallina, Thierry Mayer, and Gianluca Orefice). Preliminary version!

“Cross-Border Lobbying: How Multinationals Shape Deep Trade Policies” (with Michael Blanga-Gubbay, In Song Kim, Mathieu Parenti, and Gonzague Vannoorenberghe). 

“Lobbying and Counter-Lobbying on Trade Protection” (with Aksel Erbahar, Elisa Navarra, and Lorenzo Trimarchi).

“Trade Agreements and the Relationship Between Global and Domestic Supply Chains” (with Emmanuel Dhyne, Fabrizio Leone, Glenn Magerman, and Catherine Thomas).

Conferences funded by TRASC grant

CEPR European Research Workshop in International Trade (ERWIT), Oxford, June 4-6, 2025 (with Banu Demir, Beata Javorcik and Isabelle Mejean).

First conference on "Trade Agreements and Supply Chains", Brussels, October 29-30, 2020.