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 C.E.P.R. Discussion Papers

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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Related works:
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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