Firm-to-Firm Trade: Imports, Exports, and the Labor Market

Jonathan Eaton, Samuel Kortum and Francis Kramarz ()

No 2022-01, Working Papers from Center for Research in Economics and Statistics

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 benefited overall, those competing most directly with imports gained less, even losing in some countries entering the EU.

Pages: 67 pages
Date: 2022-01-16
New Economics Papers: this item is included in nep-bec, nep-eec and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://crest.science/RePEc/wpstorage/2022-01.pdf CREST working paper version (application/pdf)

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:crs:wpaper:2022-01

Access Statistics for this paper

More papers in Working Papers from Center for Research in Economics and Statistics Contact information at EDIRC.
Bibliographic data for series maintained by Secretariat General () and Murielle Jules Maintainer-Email : murielle.jules@ensae.Fr.