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Trade Engagement and Producer Performance

  • Gibson, Mark J.
  • Graciano, Tim A.

Models of international trade increasingly emphasize the trade decisions of individual firms or plants. These decisions take two different forms: where to source inputs (import decisions) and where to sell output (export decisions). In the literature, these decisions are rarely considered jointly. This paper analyzes the extent to which there are complementarities between importing and exporting and quantifies the effects of trade status on producer performance. We develop an analytically tractable general equilibrium model of firms’ trade decisions that incorporates both decisions simultaneously. Our model quantitatively captures many important features of plant-level manufacturing data, including the size distribution and the large performance advantage associated with trade engagement.

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File URL: http://purl.umn.edu/124833
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Paper provided by Agricultural and Applied Economics Association in its series 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington with number 124833.

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Date of creation: 2012
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Handle: RePEc:ags:aaea12:124833
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  1. Mirabelle Muuls & Mauro Pisu, 2007. "Imports and exports at the level of the firm: evidence from Belgium," LSE Research Online Documents on Economics 19711, London School of Economics and Political Science, LSE Library.
  2. Del Gatto, Massimo & Mion, Giordano & Ottaviano, Gianmarco, 2006. "Trade Integration, Firm Selection and the Costs of Non-Europe," CEPR Discussion Papers 5730, C.E.P.R. Discussion Papers.
  3. Timothy J. Kehoe & Kim J. Ruhl, 2008. "Are Shocks to the Terms of Trade Shocks to Productivity?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 804-819, October.
  4. Hiroyuki Kasahara & Joel Rodrigue, 2005. "Does the Use of Imported Intermediates Increase Productivity? Plant-Level Evidence," University of Western Ontario, Economic Policy Research Institute Working Papers 20057, University of Western Ontario, Economic Policy Research Institute.
  5. Mark J. Gibson & Tim A. Graciano, 2011. "The Decision to Import," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(2), pages 444-449.
  6. Timothy J. Kehoe & Mark J. Gibson & Kim J. Ruhl & Claustre Bajona, 2008. "Trade liberalization growth and productivity," 2008 Meeting Papers 789, Society for Economic Dynamics.
  7. Liu, Lili, 1993. "Entry-exit, learning, and productivity change Evidence from Chile," Journal of Development Economics, Elsevier, vol. 42(2), pages 217-242, December.
  8. Timothy J. Kehoe, 2003. "An Evaluation of the Performance of Applied General Equilibrium Models of the Impact of NAFTA," Levine's Working Paper Archive 506439000000000525, David K. Levine.
  9. Ananth Ramanarayanan, 2007. "International Trade Dynamics with Intermediate Inputs," 2007 Meeting Papers 722, Society for Economic Dynamics.
  10. Hiroyuki Kasahara & Beverly Lapham, 2008. "Productivity and the Decision to Import and Export: Theory and Evidence," CESifo Working Paper Series 2240, CESifo Group Munich.
  11. Gopinath, Gita & Neiman, Brent, 2014. "Trade Adjustment and Productivity in Large Crises," Scholarly Articles 12330899, Harvard University Department of Economics.
  12. Maurice Kugler & Eric Verhoogen, 2009. "Plants and Imported Inputs: New Facts and an Interpretation," American Economic Review, American Economic Association, vol. 99(2), pages 501-07, May.
  13. Davide Castellani & Francesco Serti & Chiara Tomasi, 2010. "Firms in International Trade: Importers' and Exporters' Heterogeneity in Italian Manufacturing Industry," The World Economy, Wiley Blackwell, vol. 33(3), pages 424-457, 03.
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