IDEAS home Printed from https://ideas.repec.org/p/eti/dpaper/17016.html
   My bibliography  Save this paper

Assortative Matching of Exporters and Importers

Author

Listed:
  • SUGITA Yoichi
  • TESHIMA Kensuke
  • Enrique SEIRA

Abstract

We develop a novel approach to detect Beckerian positive assortative matching (PAM) of exporters and importers by capability. Conventional approaches examining firm characteristics across matches in cross-sectional data suffer from an endogeneity problem when firm characteristics reflect unobserved partner characteristics. Instead, using the entry of new exporters induced by trade liberalization as an exogenous shock to the capability rank of incumbent exporters, we investigate resulting re-matching patterns among incumbent exporters and importers. Examining Mexico-U.S. textile/apparel trade that experienced a surge in Chinese exporters after the Multi-Fibre Arrangement's end, we provide the first evidence for Beckerian PAM in exporter-importer relationships.

Suggested Citation

  • SUGITA Yoichi & TESHIMA Kensuke & Enrique SEIRA, 2017. "Assortative Matching of Exporters and Importers," Discussion papers 17016, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:17016
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/17e016.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    2. Nina Pavcnik, 2002. "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(1), pages 245-276.
    3. E. Baldwin, Richard & Ito, Tadashi, 2011. "Quality Competition Versus Price Competition Goods: An Empirical Classification," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 26, pages 110-135.
    4. Benjamin R. Mandel, 2010. "Heterogeneous firms and import quality: evidence from transaction-level prices," International Finance Discussion Papers 991, Board of Governors of the Federal Reserve System (U.S.).
    5. Stephen J. Redding, 2011. "Theories of Heterogeneous Firms and Trade," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 77-105, September.
    6. Richard Baldwin & James Harrigan, 2011. "Zeros, Quality, and Space: Trade Theory and Trade Evidence," American Economic Journal: Microeconomics, American Economic Association, vol. 3(2), pages 60-88, May.
    7. Patrick Legros & Andrew F. Newman, 2007. "Beauty Is a Beast, Frog Is a Prince: Assortative Matching with Nontransferabilities," Econometrica, Econometric Society, vol. 75(4), pages 1073-1102, July.
    8. Marc J. Melitz & Stephen J. Redding, 2015. "New Trade Models, New Welfare Implications," American Economic Review, American Economic Association, vol. 105(3), pages 1105-1146, March.
    9. Patrick Legros & Andrew Newman, 2007. "Beauty is a beast, frog is a prince :assortative matching in a nontransferable world," ULB Institutional Repository 2013/7022, ULB -- Universite Libre de Bruxelles.
    10. Amit K. Khandelwal & Peter K. Schott & Shang-Jin Wei, 2013. "Trade Liberalization and Embedded Institutional Reform: Evidence from Chinese Exporters," American Economic Review, American Economic Association, vol. 103(6), pages 2169-2195, October.
    11. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2012. "The Empirics of Firm Heterogeneity and International Trade," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 283-313, July.
    12. Andrew B. Bernard & Andreas Moxnes & Karen Helene Ulltveit-Moe, 2018. "Two-Sided Heterogeneity and Trade," The Review of Economics and Statistics, MIT Press, vol. 100(3), pages 424-439, July.
    13. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-846, July-Aug..
    14. James E. Rauch & Alessandra Casella, 2003. "Overcoming Informational Barriers to International Resource Allocation: Prices and Ties," Economic Journal, Royal Economic Society, vol. 113(484), pages 21-42, January.
    15. Marcela Eslava & James Tybout & David Jinkins & C. Krizan & Jonathan Eaton, 2015. "A Search and Learning Model of Export Dynamics," 2015 Meeting Papers 1535, Society for Economic Dynamics.
    16. Irene Brambilla & Amit K. Khandelwal & Peter K. Schott, 2010. "China's Experience under the Multi-Fiber Arrangement (MFA) and the Agreement on Textiles and Clothing (ATC)," NBER Chapters, in: China's Growing Role in World Trade, pages 345-387, National Bureau of Economic Research, Inc.
    17. Helble, Matthias & Okubo, Toshihiro, 2008. "Heterogeneous quality firms and trade costs," Policy Research Working Paper Series 4550, The World Bank.
    18. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    19. Costas Arkolakis & Arnaud Costinot & Andres Rodriguez-Clare, 2012. "New Trade Models, Same Old Gains?," American Economic Review, American Economic Association, vol. 102(1), pages 94-130, February.
    20. Casella, Alessandra & Rauch, James E., 2002. "Anonymous market and group ties in international trade," Journal of International Economics, Elsevier, vol. 58(1), pages 19-47, October.
    21. Kaneko, Mamoru & Wooders, Myrna Holtz, 1989. "The core of a continuum economy with widespread externalities and finite coalitions: From finite to continuum economies," Journal of Economic Theory, Elsevier, vol. 49(1), pages 135-168, October.
    22. Macchiavello, Rocco, 2010. "Development Uncorked: Reputation Acquisition in the New Market for Chilean Wines in the UK," CEPR Discussion Papers 7698, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Krolikowski, Pawel M. & McCallum, Andrew H., 2021. "Goods-market frictions and international trade," Journal of International Economics, Elsevier, vol. 129(C).
    2. Andrew B. Bernard & Andreas Moxnes, 2018. "Networks and Trade," Annual Review of Economics, Annual Reviews, vol. 10(1), pages 65-85, August.
    3. Cooray, Arusha & Jha, Chandan Kumar & Panda, Bibhudutta, 2023. "Corruption and assortative matching of partners in international trade," European Journal of Political Economy, Elsevier, vol. 77(C).
    4. Caichun Chai & Eilin Francis & Tiaojun Xiao, 2021. "Supply chain dynamics with assortative matching," Journal of Evolutionary Economics, Springer, vol. 31(1), pages 179-206, January.
    5. Egger, Peter H. & Erhardt, Katharina & Lassmann, Andrea, 2019. "Immigration and firms’ integration in international production networks," European Economic Review, Elsevier, vol. 111(C), pages 1-34.
    6. Ornelas, Emanuel & Turner, John L. & Bickwit, Grant, 2021. "Preferential trade agreements and global sourcing," Journal of International Economics, Elsevier, vol. 128(C).
    7. Carballo, Jeronimo & Ottaviano, Gianmarco I.P. & Volpe Martincus, Christian, 2018. "The buyer margins of firms' exports," Journal of International Economics, Elsevier, vol. 112(C), pages 33-49.
    8. Shinsuke Tanaka & Kensuke Teshima & Eric Verhoogen, 2022. "North-South Displacement Effects of Environmental Regulation: The Case of Battery Recycling," American Economic Review: Insights, American Economic Association, vol. 4(3), pages 271-288, September.
    9. Kazunobu Hayakawa & Nuttawut Laksanapanyakul & Shujiro Urata, 2016. "Measuring the costs of FTA utilization: evidence from transaction-level import data of Thailand," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(3), pages 559-575, August.
    10. Xu, Jianwei & Du, Qingyuan & Wang, Yaqi, 2019. "Two-sided heterogeneity and exchange rate pass-through," Economics Letters, Elsevier, vol. 183(C), pages 1-1.
    11. C.J. Krizan & James Tybout & Zi Wang & Yingyan Zhao, 2020. "Are Customs Records Consistent Across Countries? Evidence from the U.S. and Colombia," Working Papers 20-11, Center for Economic Studies, U.S. Census Bureau.
    12. Taiji Furusawa & Tomohiko Inui & Keiko Ito & Heiwai Tang, 2017. "Global Sourcing and Domestic Production Networks," CESifo Working Paper Series 6658, CESifo.
    13. Carballo, Jerónimo & Rodriguez Chatruc, Marisol & Salas Santa, Catalina & Volpe Martincus, Christian, 2022. "Online business platforms and international trade," Journal of International Economics, Elsevier, vol. 137(C).
    14. Melissa Dell & Benjamin Feigenberg & Kensuke Teshima, 2019. "The Violent Consequences of Trade-Induced Worker Displacement in Mexico," American Economic Review: Insights, American Economic Association, vol. 1(1), pages 43-58, June.
    15. James Tybout & David Jinkins & Daniel Yi Xu & Jonathan Eaton, 2016. "Two-sided Search in International Markets," 2016 Meeting Papers 973, Society for Economic Dynamics.
    16. Raymond Robertson & Timothy J. Halliday & Sindhu Vasireddy, 2020. "Labour market adjustment to third‐party competition: Evidence from Mexico," The World Economy, Wiley Blackwell, vol. 43(7), pages 1977-2006, July.
    17. Maria D. Tito, 2019. "Exporters of Services: A Look at U.S. Exporters Outside of the Manufacturing Sector," Finance and Economics Discussion Series 2019-063, Board of Governors of the Federal Reserve System (U.S.).
    18. Masahiro Endoh, 2020. "The Impact of Firms' International Trade on Domestic Suppliers," Keio-IES Discussion Paper Series 2020-016, Institute for Economics Studies, Keio University.
    19. SUGITA, Yoichi & 杉田, 洋一, 2017. "A Matching Theory of Global Supply Chains," Discussion paper series HIAS-E-62, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carballo, Jeronimo & Ottaviano, Gianmarco I.P. & Volpe Martincus, Christian, 2018. "The buyer margins of firms' exports," Journal of International Economics, Elsevier, vol. 112(C), pages 33-49.
    2. Manova, Kalina & Yu, Zhihong, 2017. "Multi-product firms and product quality," Journal of International Economics, Elsevier, vol. 109(C), pages 116-137.
    3. Melitz, Marc J. & Redding, Stephen J., 2014. "Heterogeneous Firms and Trade," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 1-54, Elsevier.
    4. Benguria, Felipe, 2021. "The matching and sorting of exporting and importing firms: Theory and evidence," Journal of International Economics, Elsevier, vol. 131(C).
    5. Andrew B. Bernard & Andreas Moxnes, 2018. "Networks and Trade," Annual Review of Economics, Annual Reviews, vol. 10(1), pages 65-85, August.
    6. Liu, Qing & Lu, Yi, 2015. "Firm investment and exporting: Evidence from China's value-added tax reform," Journal of International Economics, Elsevier, vol. 97(2), pages 392-403.
    7. Antoine Gervais, 2015. "Product quality and firm heterogeneity in international trade," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(3), pages 1152-1174, August.
    8. Paul S. Segerstrom & Ignat Stepanok, 2018. "Learning How To Export," Scandinavian Journal of Economics, Wiley Blackwell, vol. 120(1), pages 63-92, January.
    9. Bloom, Nick & Manova, Kalina & Teng Sun, Stephen & Van Reenen, John & Yu, Zhihong, 2018. "Managing trade: evidence from China and the US," LSE Research Online Documents on Economics 88703, London School of Economics and Political Science, LSE Library.
    10. Rodrigo Adão & Costas Arkolakis & Sharat Ganapati, 2020. "Aggregate Implications of Firm Heterogeneity: A Nonparametric Analysis of Monopolistic Competition Trade Models," Working Papers 2020-161, Becker Friedman Institute for Research In Economics.
    11. Alessandria, George & Choi, Horag & Ruhl, Kim J., 2021. "Trade adjustment dynamics and the welfare gains from trade," Journal of International Economics, Elsevier, vol. 131(C).
    12. Matthieu Crozet & Keith Head & Thierry Mayer, 2012. "Quality Sorting and Trade: Firm-level Evidence for French Wine," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 609-644.
    13. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2012. "The Empirics of Firm Heterogeneity and International Trade," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 283-313, July.
    14. Anne‐Célia Disdier & Carl Gaigné & Cristina Herghelegiu, 2023. "Do standards improve the quality of traded products?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(4), pages 1238-1290, November.
    15. Clemence Lenoir & Isabelle Mejean & Julien Martin, 2018. "Search Frictions in International Good Markets," 2018 Meeting Papers 878, Society for Economic Dynamics.
    16. Carlo Perroni & Davide Suverato, 2023. "Skills scarcity and export intensity," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(2), pages 719-757, May.
    17. Nicholas Bloom & Paul Romer & Stephen J Terry & John Van Reenen, 2021. "Trapped Factors and China’s Impact on Global Growth [Competition and innovation: an inverted-U relationship]," The Economic Journal, Royal Economic Society, vol. 131(633), pages 156-191.
    18. Davidson, Carl & Matusz, Steven J., 2012. "A model of globalization and firm-worker matching: How good is good enough?," International Review of Economics & Finance, Elsevier, vol. 23(C), pages 5-15.
    19. Andrea Ariu, 2016. "Services versus goods trade: a firm-level comparison," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(1), pages 19-41, February.
    20. Scott L Baier & Jeffrey H Bergstrand & Matthew W Clance, 2017. "Heterogeneous economic integration agreements' effects, gravity, and welfare," Discussion Papers 2017-05, University of Nottingham, GEP.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eti:dpaper:17016. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: TANIMOTO, Toko (email available below). General contact details of provider: https://edirc.repec.org/data/rietijp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.