Working paper(s):

  1. Financial constraints and trade intermediation - Job market paper

  • Abstract: Firms can export directly or indirectly via a trade intermediary. This paper examines the relationship between financial frictions and how firms decide between these modes of export. Financial frictions arise because firms rely on external finance for their working capital needs but can only borrow up to a multiple of their assets. I calibrate the model using a dataset covering Vietnamese firms from 2005 to 2015. I find that indirect exporting serves as a substitute for financial development. As financial frictions increase, the share of firms electing to be indirect exporters increases as well. A 25% subsidy for indirect exporting further reduces the average assets that a firm must save by 3.61% in the first year with smaller but persistent effects thereafter. A financial reform has the biggest impact on small firms, increasing their export participation rates. The effects of the reform are stronger in a model without indirect exporting. This indicates that indirect exporting already acts as a platform to mitigate the effects of financial frictions.

  1. Multi-product firms and learning about demand (Draft available upon request )

  • Abstract: The majority of exporters are multi-product exporters and they frequently adjust their product mix to a destination by adding or dropping a product. To explain firm-level product switching behaviors, I build a model of learning where the demand for a product in a market is uncertain. Conditional on entry into a market, firms learn about the demand by observing signals available to them, update their beliefs and respond by adjusting their product mix. A one standard deviation increase in the value of signals from other firms increases the likelihood of adding and dropping a product by 3.3% and 4.1% respectively. When the firm can learn from their own experience, a one standard deviation increase in their own signal decreases the probability of dropping a product by 8.9%. As product tenure increases, learning from other firms becomes less important compared to learning from a firm's own experience.

Work(s) in progress:

  1. Cross market learning about demand