Using Equity Market Reactions to Infer Exposure to Trade Liberalization

Anew Greenland, Mihai Ion, John Lopresti and Peter Schott

No 17387, CEPR Discussion Papers from Centre for Economic Policy Research

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 to trade liberalizations as well as dramatically different responses among small versus large firms, even within narrow industries.

Keywords: China shock; Event study; Pntr; Abnormal returns; Cusfta (search for similar items in EconPapers)
Date: 2022-06
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Journal Article: Using equity market reactions to infer exposure to trade liberalization (2024)
Working Paper: Using Equity Market Reactions to Infer Exposure to Trade Liberalization (2020)
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