Using equity market reactions to infer exposure to trade liberalization

Andrew Greenland, Mihai Ion, John Lopresti and Peter K. Schott

Journal of International Economics, 2024, vol. 152, issue C

Abstract: We propose a method for identifying exposure to changes in trade policy based on asset prices that has several advantages over standard measures: it encompasses all avenues of exposure, it is natively firm-level, it yields estimates for both goods and service producers, and it can be used to study reductions in difficult-to-quantify non-tariff-barriers in a way that controls naturally for broader macroeconomic shocks. Applying our method to two well-studied US trade liberalizations provides new insight into service-sector responses and reveals dramatically different outcomes among small versus large firms, even within narrow industries.

Keywords: PNTR; China; CUSFTA; Trade policy (search for similar items in EconPapers)
Date: 2024
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Related works:
Working Paper: Using Equity Market Reactions to Infer Exposure to Trade Liberalization (2022)
Working Paper: Using Equity Market Reactions to Infer Exposure to Trade Liberalization (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:152:y:2024:i:c:s0022199624001272

DOI: 10.1016/j.jinteco.2024.104000

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