Firm-to-firm trade: Imports, exports, and the labor market

Jonathan Eaton, Samuel Kortum and Francis Kramarz ()

No 16997, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Customs data reveal heterogeneity and granularity of relationships among buyers and sellers. A key insight is how more exports to a destination break down into more firms selling there and more buyers per exporter. We develop a quantitative general equilibrium model of firm-to-firm matching that builds on this insight to separate the roles of iceberg costs and matching frictions in gravity. In the cross section, we find matching frictions as important as iceberg costs in impeding trade, and more sensitive to distance. Because domestic and imported intermediates compete directly with labor in performing production tasks, our model also fits the heterogeneity of labor shares across French producers. Applying the framework to the 2004 expansion of the European Union, reduced iceberg costs and reduced matching frictions contributed equally to the increase in French exports to the new members. While workers benefitted overall, those competing most directly with imports gained less, even losing in some countries entering the EU.

JEL-codes: F12 F14 F16 (search for similar items in EconPapers)
Date: 2022-02
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP16997 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Firm-to-Firm Trade: Imports, Exports, and the Labor Market (2022)
Working Paper: Firm-to-Firm Trade: Imports, Exports, and the Labor Market (2022)
Working Paper: Firm-to-Firm Trade: Imports, Exports, and the Labor Market (2022)
Working Paper: Firm-to-Firm Trade: Imports, exports, and the labor market (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:16997

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP16997

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().