The Gains from Input Trade with Heterogeneous Importers

Joaquin Blaum, Claire Lelarge and Michael Peters

American Economic Journal: Macroeconomics, 2018, vol. 10, issue 4, 77-127

Abstract: Firms differ substantially in their participation in foreign input markets. We develop a methodology to measure the aggregate effects of input trade that takes such heterogeneity into account. We provide a theoretical result that holds in a variety of settings: the firm-level data on value added and domestic expenditure shares in material spending is sufficient to compute the change in consumer prices due to a shock to the import environment. We characterize the bias of approaches that rely on aggregate statistics. In an application to French data, input trade reduces the prices of manufacturing products by 27 percent.

JEL-codes: D24 E31 F12 F14 L11 L25 L60 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/mac.20160426
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Citations: View citations in EconPapers (99)

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Related works:
Working Paper: The Gains from Input Trade with Heterogeneous Importers (2016)
Working Paper: The Gains from Input Trade with Heterogeneous Importers (2016)
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