Tuesday, 24 January 2012

ERSA workshop

This week I am attending the ERSA workshop Contemporary Analysis of International Trade. The workshop is built around what Jim Fairburn calls FUGSA - the Feenstra User Group SA - and Jim, Lawrence Edwards and Neil Rankin have been covering a number of topics in International Trade based on Feenstra's book.


On Monday Jim discussed the link between trade and growth in three parts:

  • The links between trade and productivity,
  • Growth and monopolistic competition, and
  • The empirical evidence on trade and growth.
Neil Rankin followed with a presentation on models and evidence on firms and international trade. The key framework is the Mellitz model and building on an explanation of the model, Neil presented some interesting points:

  • Few firms export and exporters are diffferent - they are typically large, established firms that are capital intensive and use high-skill labour, they are more productive and pay higher wages.
  • Multi-product firms that exporting to multiple countries are rare, but they contribute the bulk of the value of exports.
  • There are more single-product firms exporting to a single country but the values are low.
  • Exporters are significant importers of inputs.
This simplifies a much longer and involved explanation of firms and trade, but clearly raises some interesting issues:

  • Is it self-selection or can exporters learn by doing? Who are the so-called "born global" firms?
  • Looking at U.S. evidence it does not seem to help to aid or develop small-firm exporters. Policy should rather support firms to grow big and some will export.
  • If exporters import inputs it does not seem to be sensible to weaken the exchange rate to support exporters.
Today saw presentations on anti-dumping, micro-evidence on price setting and product market evidence of African integration, but I accidentally deleted my UPAD notes and won't comment off the cuff anymore than saying it was interesting. If the slides are shared, I'll add the stories!

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