Essays in International Trade

Abstract

Trade reform is an important policy tool as it: governs access to foreign markets and the organization of global supply chains; influences international trade flows; and has implications for consumer welfare in a given country. With the advent of more disaggregated data, trade economists have taken particular interest in evaluating firm behavior in response to trade liberalization. This dissertation adds to the discussion by evaluating firm-level patterns and outcomes in three distinct settings. In the first chapter, I theoretically explain and empirically support a linkage between a firm’s import sources and its export partners via fixed cost complementarities. The study uses variation from China’s accession to the WTO to identify this pattern across firms. In the second chapter, I present a theoretical model in which both output tariffs and input tariffs affect the firm’s relative demand for skilled labor. I show that input (output) tariff reductions from the Chile-China Free Trade Agreement induced firms to increase their skill intensity (reduce their labor force). In the third chapter, I show that the estimated impact of free trade agreements on firm-level intra-bloc flows is sensitive to the selected empirical specification and measure of trade reform. I construct a product level measure of trade reform and show that a panel data approach provides the most plausible estimates. I find that firm-level trade flows were not particularly responsive to preferential rates from the ASEAN-China Free Trade Agreement in the short-run. This dissertation showcases some of the ways trade policy can interact with industrial organization, labor markets, and the evolution of productive activities over time.