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Firms in International Trade - scholar.harvard.edu PDF

71 Pages·2010·2.63 MB·English
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Firms in International Trade (with an Application to Spain) Pol Antràs Puchal (Harvard University) Rubén Segura-Cayuela (Banco de España) with DDiieeggoo RRooddrríígguueezz RRooddrríígguueezz ((UU. CCoommpplluutteennssee)) December 2010 SERIES Invited Lecture 1 OOverviiew off RRecent DDeevveellooppmmeennttss 2 Neoclassical Trade Theory Firms are treated as a black box (supply side =  production set) OOfftten assume consttantt retturns tto scalle, so ffiirm siize iis  indeterminate GGeenneerraall eeqquuiilliibbrriiuumm oonnllyy ppiinnss ddoowwnn tthhee ssiizzee ooff tthhee  sector or industry to which the firm belongs VVeerryy ppoowweerrffuull tthheeoorryy,, bbuutt ooff lliimmiitteedd uussee wwhheenn ssttuuddyyiinngg  firm-level issues in international trade December 2010 SERIES Invited Lecture 3 New Trade Theory Introduced increasing returns, imperfect competition  and product differentiation TThhiis hhellpedd resollve thhe iinddetermiinacy off ffiirm siize  With product differentiation, firms face downward sloping  ddeemmaanndd ccuurrvveess aanndd tthheerree eexxiissttss aann ooppttiimmaall ffiirrmm ssiizzee Free entry (and general equilibrium) then pins down  iinndduussttrryy ssiizzee aanndd aallssoo tthhee nnuummbbeerr ooff ffiirrmmss wwiitthhiinn aann industry New Trade Theoryy rationalized two-wayy trade flows in  similar products across countries December 2010 SERIES Invited Lecture 4 Some Problematic Predictions As insightful as New Trade Theory is, it delivers  some counterfactual predictions BBecause allll ffiirms wiithhiin a sector are treatedd  symmetrically, either all firms within an industry eexxppoorrtt oorr nnoonnee ddooeess ((aanndd tthheeyy aallwwaayyss ddoo wwiitthh CCEESS)) Trade liberalization generally affects all firms within  aann iinndduussttrryy ssyymmmmeettrriiccaallllyy ((aanndd wwhheenn iitt ddooeessnn’tt, there is no way to predict these asymmetries) TThheessee pprreeddiiccttiioonnss aarree pprroobblleemmaattiicc bbeeccaauussee tthheeyy ddoo  not provide a good description of reality December 2010 SERIES Invited Lecture 5 “Evidence” “There is no good reason to believe that the  assumptions of the Dixit-Stiglitz model – a ccoonnttiinnuuuumm ooff ggooooddss tthhaatt eenntteerr ssyymmmmeettrriiccaallllyy iinnttoo demand, with the same cost functions, and with the eellaassttiicciittyy ooff ssuubbssttiittuuttiioonn bbeettwweeeenn aannyy ttwwoo ggooooddss bbootthh constant and the same for any pair you choose – are remotely true in reality.” December 2010 SERIES Invited Lecture 6 “Evidence” “There is no good reason to believe that the  assumptions of the Dixit-Stiglitz model – a ccoonnttiinnuuuumm ooff ggooooddss tthhaatt eenntteerr ssyymmmmeettrriiccaallllyy iinnttoo demand, with the same cost functions, and with the eellaassttiicciittyy ooff ssuubbssttiittuuttiioonn bbeettwweeeenn aannyy ttwwoo ggooooddss bbootthh constant and the same for any pair you choose – are remotely true in reality.” Paul Kruggman, Nobel Lecture 2008  December 2010 SERIES Invited Lecture 7 Real Evidence: Heterogeneity in Data Standard deviation of log sales  Productivity: Standard deviation of log value added  per worker for U.S. plants: Overall: 0.75  Within 4-digit sectors (450 sectors): 0.66  December 2010 SERIES Invited Lecture 8 Exporters are in the Minority December 2010 SERIES Invited Lecture 9 Exporters in the U.S. (4-digit) December 2010 SERIES Invited Lecture 10

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Firms in International Trade (with an Application to Spain) Pol Antràs Puchal (Harvard University) Rubén Segura-Cayuela (Banco de España) with
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