Online Geneva Trade and Development Workshop - Kalina Manova
The Geneva Trade and Development Workshop (GTDW) is a seminar series, featuring invited speakers in the area of International Trade. It has been running for over ten years, with onsite meetings on a weekly basis in the Fall (September – December) and Spring (February – June) semesters. It is organized jointly by the Graduate Institute in Geneva (IHEID), the University of Geneva (UniGe), the World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD). The online edition of GTDW will be co-organized with the Centre for Economic Policy Research (CEPR).
On 15th March, Kalina Manova will present the paper "Firm Heterogeneity and Imperfect Competition in Global Production Networks", joint with Hanwei Huang and Frank Pisch.
Paper abstract: We study the role of firm heterogeneity and imperfect competition for global production networks and the gains from trade. We develop a quantifiable trade model with (i) two-sided firm heterogeneity, (ii) matching frictions, and (iii) oligopolistic competition upstream. Combining highly disaggregated data on firms' production and trade transactions for China and France, we present empirical evidence in line with the model that cannot be rationalized without features (i)-(iii). Downstream French buyers import higher volumes and quantities at lower prices when upstream Chinese markets become more competitive. These effects are stronger for larger, more productive buyers and weaker when input suppliers are more heterogeneous. Counterfactual analyses indicate that lower barriers to entry upstream, lower matching costs, and lower trade costs amplify firm productivity, firm size dispersion and aggregate welfare downstream. These effects operate through a combination of improved matching of buyers and suppliers, gains from variety, and lower mark-ups. Global production networks thus generate greater impacts and international spillovers from national industrial policy and trade liberalization.
