The Gains from Input Trade with Heterogeneous Importers

By J. Blaum, Claire Lelarge, Michael Peters. American Economic Journal: Macroeconomics, 2018

137 citations recorded by the source corpus.

Firms differ substantially in their participation in foreign input markets. We develop a methodology to measure the aggregate effects of input trade that takes such heterogeneity into account. We provide a theoretical result that holds in a variety of settings: the firm-level data on value added and domestic expenditure shares in material spending is sufficient to compute the change in consumer prices due to a shock to the import environment. We characterize the bias of approaches that rely on aggregate statistics. In an application to French data, input trade reduces the prices of manufacturing products by 27 percent. (JEL D24, E31, F12, F14, L11, L25, L60)

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/3106ce6012a40e8c65c5e5218f9a1c772f3d97c1

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Strategy and Management

Citations in the corpus

Trade, Quality Upgrading, and Input Linkages: Theory and Evidence from Colombia (2018, background): “where labor cost w(q) is defined in equation (10) as before.”