Assistant Professor of International Economics
School of Advanced International Studies, Johns Hopkins University
School of Advanced International Studies
Johns Hopkins University
1717 Massachusetts Avenue NW
Washington DC, 20036
Curriculum Vitae pdf
An Empirical Dynamic Model of Trade with Consumer Accumulation, April 2017 pdf
Sunk entry costs have been identified as the main export barrier by standard dynamic models of trade. However, these large entry costs are inconsistent with the existence of many small new exporters with low survival rates in foreign markets. To reconcile these patterns, this paper develops a dynamic structural model of trade in which firms slowly accumulate consumers in foreign markets. Estimating the model using export data from individual firms and a Markov chain Monte Carlo estimator, the model correctly predicts lower survival rates for new exporters and estimates much lower entry costs of exporting - less than a third of those estimated in the absence of consumer accumulation. These results have important implications at the aggregate level. In contrast to the standard model without consumer accumulation, this model correctly replicates important facts regarding the aggregate response of international trade to simulated shocks. Moreover, out-of-sample predictions demonstrate that the model better predicts actual trade responses to an observed shock than the standard model.
Estimating firm-level product quality with trade data, February 2017 pdf
Joint with Gabriel Smagghue. Winner of the FREIT EIIT 2013 best graduate student paper.
Revise and Resubmit, Journal of International Economics
We propose a new instrumental variable strategy to estimate product quality at the firm-level, using trade data. Interacting firm importing shares by country with real exchange rates (RER), we obtain a cost shifter that varies across firms and is arguably orthogonal to product quality. We use this import weighted RER as an instrument for export prices and we identify firm-level quality from residual export variations, after controlling for prices. Our quality estimates correlate sensibly to firm characteristics (e.g. wages) and to alternative measures of quality available for some rare sectors. By contrast, our estimates are not always consistent with prices, a popular proxy for quality. We show for instance that firms add products to their export portfolio when their quality increases, as expected, while simultaneously their prices decrease. This suggests that our empirical strategy, by delivering quality estimates which, unlike prices, are not polluted with productivity variations, should contribute to future research on the link between firm-level product quality and globalization.
Works in Progress
The Impact of Chinese Competition along the Quality Ladder
Joint with Gabriel Smagghue
We document that French firms with low prices are significantly more affected by the rise of China in international markets. To rationalize this finding, we propose a random coefficient, discrete choice model of demand in which consumers have heterogeneous preferences regarding product characteristics and prices. This heterogeneity in preferences implies more realistic substitution patterns across producers relative to existing trade models. In particular, it allows for French varieties located at the bottom of the price distribution to be closer substitutes to Chinese goods, due to their proximity in the product space. Moreover, it implies that low-quality French firms can upgrade their product quality to escape low-cost countries competition. Using firm-level trade data, we estimate the model and quantify the unequal effect of China across French exporters in the footwear industry, between 1997 and 2010. We find substantial differences across firms: the rise in Chinese exports implied losses in market shares five times larger at the bottom of the price distribution relative to the top. Moreover, we show that allowing French firms to adjust their product quality does little to help them escape Chinese competition.
Microeconomics (SA.300.700), Syllabus
Fall 2016, Fall 2017