Research on Global Trade

Articles

Lessons from the Anti-Globalists
The protectionism advocated by Trump, Le Pen, and others poses a similar threat to the world economy.

Navigating America’s Economic Policy Shocks
What’s the likely impact of Trump policy moves such as a border adjustment tax and increased tariffs on Chinese imports? Here’s what the data says.

Global Trade: Myths and Truths
Many popular beliefs surrounding cross-border commerce are debunked by data.

The Truth About Trade and Jobs
The mass exodus of jobs overseas is a great exaggeration. But the developed world still needs to prep workers to take on non-manufacturing jobs.

Trading Up
New research suggests access to high-income export markets could raise productivity and profitability for businesses across the developing world.

Clinton or Trump, Manufacturing Jobs Unlikely to Return
In an election season where the candidates can’t seem to agree on anything, opposition to free trade has become a rare point of commonality. But repealing trade is unlikely to restore the manufacturing jobs that have been lost over the past two decades.

Why Trade Is in Trouble
The election of Donald Trump could “destroy the international trading system overnight,” says Ernesto Zedillo, former president of Mexico.

The New Geo-Economics
Now, more than ever, the world needs trade agreements that don’t exploit emerging economies says Nobel Laureate Joseph E. Stiglitz.

Will the TPP Help Latin America?
Not if the United States gets everything it’s asking for, says Andrés Velasco, former finance minister of Chile.

The Trans-Pacific Partnership: It’s a Flawed Deal
Joseph E. Stiglitz, a Nobel Laureate, weighs in on the drawbacks of a much-vaunted trade deal.

The Economic Ignorance of Trump and Sanders
In an op-ed for The National Review, Columbia Business School dean Glenn Hubbard argues against policies being touted by two US presidential hopefuls.

Videos

Douglas IrwinWhy Trade Is Not a Zero-Sum Game
Trade brings many benefits, says Douglas Irwin of Dartmouth College; it lowers prices and increases variety, among other things.

Caroline FreundHow Trade Boosts National Security
Countries that trade with one another are less likely to resort to military action to resolve conflicts, says Caroline Freund of the Peterson Institute for International Economics.

Papers by Chazen Senior Scholars

Trade, Wages, and Inequality

Changes in Between-Group Inequality: Computers, Occupations, and International Trade (2016)
Ariel Burstein, Eduardo Morales, Jonathan Vogel
We quantify the impact of several determinants of changes in US between-group inequality. We find that the combination of computerization and shifts in occupation demand account for roughly 80% of the rise in the skill premium, with computerization alone accounting for roughly 60%.

International Trade, Technology, and the Skill Premium (2016)
Ariel Burstein and Jonathan Vogel
What are the consequences of international trade on the wage of college relative to non-college workers (the skill premium)? We incorporate skill intensity differences across firms and sectors and skill abundance differences across countries into an otherwise standard Ricardian model of international trade.

Measuring the Unequal Gains from Trade (2015)
Pablo D. Fajgelbaum, Amit K. Khandelwal
Individuals that consume different baskets of goods are differentially affected by relative price changes caused by international trade. We develop a methodology to measure the unequal gains from trade across consumers within countries. The approach requires data on aggregate expenditures and parameters estimated from a non-homothetic gravity equation. We find that trade typically favors the poor, who concentrate spending in more traded sectors.

Comparative Advantage and Optimal Trade Policy (2014)
Arnaud Costinot, Dave Donaldson, Jonathan Vogel, Iván Werning
In this paper we explore these issues in the context of a canonical Ricardian model. Our main results imply that optimal import tariffs should be uniform, whereas optimal export subsidies should be weakly decreasing with respect to comparative advantage, reflecting the fact that countries have more room to manipulate prices in their comparative-advantage sectors.

Factor Prices and International Trade: A Unifying Perspective (2011)
Ariel Burstein and Jonathan Vogel
How do trade liberalizations affect relative factor prices and to what extent do they cause factors to reallocate across sectors? We first present a general accounting framework that nests a wide range of models that have been used to study the link between globalization and factor prices and from which we obtain two sufficient statistics that determine factor prices. Under some restrictions, changes in the "factor content of trade" (FCT) fully determine the impact of trade on relative factor prices. We show how heterogeneous firms’ decisions shape the FCT, and, therefore, the impact of trade liberalization on relative factor prices and between-sector factor allocation.

Trade, Firms, and Wages: Theory and Evidence (2011)
Mary Amiti and Donald R. Davis
How does trade liberalization affect wages? This is the first paper to consider in theory and data how the impact of final and intermediate input tariff cuts on workers' wages varies with the global engagement of their firm.

Good Jobs, Bad Jobs, and Trade Liberalization (2011)
Donald R. Davis and James Harrigan
How do labor markets adjust to trade liberalization? Leading models of intraindustry trade (Krugman (1981), Melitz (2003) assume homogeneous workers and full employment, and thus predict that all workers win from trade liberalization, a conclusion at odds with the public debate. Our paper develops a new model that merges Melitz (2003) with Shapiro and Stiglitz (1984), so also links product market churning to labor market churning.

Patterns of Trade

Export Destinations and Input Prices (2016)
Paul Bastos, Joana Silva, Eric Verhoogen
This paper examines the extent to which the destination of exports matters for the input prices paid by firms, using detailed customs and firm-product-level data from Portugal.

Firm Exports and Multinational Activity Under Credit Constraints (2015)
Kalina Manova, Shang-Jin Wei, and Zhiwei Zhang
We provide firm-level evidence that credit constraints restrict international trade and affect the pattern of multinational activity. We show that foreign affiliates and joint ventures in China have better export performance than private domestic firms in financially more vulnerable sectors. These results are stronger for destinations with higher trade costs and not driven by firm size or other sector characteristics.

Does trade globalization induce or inhibit corporate transparency? Unbundling the growth potential and product market competition channels (2014)
Hui Tong, Shang-Jin Wei
Trade globalization may affect corporate transparency via multiple channels, with potentially opposite signs. We aim to empirically disentangle these channels by tracking evolution of corporate transparency for 4061 listed firms in tradable sectors in 49 countries during 1992–2005. By using detailed tariff schedules, we measure changes in growth opportunities and product market competition enabled by foreign and domestic trade liberalizations, respectively.

Trade and Development

Protectionist Fallacies (2016)
Jagdish Bhagwati and Pravin Krishna
Comments prepared for the "Trade Issues Today" conference at Columbia University on September 30, 2016.

On the Origins and Development of Pakistan’s Soccer-Ball Cluster (2016)
David Atkin, Azam Chaudhry, Shamyla Chaudry, Amit K. Khandelwal, Tariq Raza, and Eric Verhoogen
Sialkot, Pakistan, is the world center of hand-stitched soccer-ball manufacturing. The existence of the cluster is puzzling and seems to argue against the “home market effect,” since there is little local demand for soccer balls. The case study underlines the importance of longer-term historical dynamics and the role of industrial policy for understanding a country’s contemporaneous pattern of specialization in the world economy.

Exporting and Firm Performance: Evidence from a Randomized Experiment (2016)
David Atkin, Amit K. Khandelwal, Adam Osman
We conduct a randomized experiment that generates exogenous variation in the access to foreign markets for rug producers in Egypt. Combined with detailed survey data, we causally identify the impact of exporting on firm performance.

Variety In, Variety Out: Imported Input and Product Scope Expansion in India (2016)
Penny Goldberg, Amit Khandelwal, Nina Pavcnik
In this book chapter, we discuss and extend the findings of our recent research agenda (Goldberg, Khandelwal, Pavcnik and Topalova, henceforth, GKPT, 2010a, 2010b, 2010c) that examines product mix adjustments by Indian firms during the 1990s.

Tracing Value-Added and Double Counting in Gross Exports (2014)
Robert Koopman, Zhi Wang, and Shang-Jin Wei
This paper proposes an accounting framework that breaks up a country’s gross exports into various value-added components by source and additional double-counted terms.

Globalization, Markups, and US Welfare (2010)
Robert C. Feenstra and David E. Weinstein
This paper is the first attempt to structurally estimate the impact of globalization on markups, and the effect of changing markups on welfare, in a monopolistic competition model.