Import Competition and the Cost of Capital

Julien Sauvagnat, Erik Loualiche and Jean-Noel Barrot
Additional contact information
Erik Loualiche: MIT Sloan School of Management
Jean-Noel Barrot: MIT Sloan School of Management

No 898, 2015 Meeting Papers from Society for Economic Dynamics

Abstract: We investigate how the displacement risk associated with import competition is reflected in the cost of capital. We sort U.S. industries on their exposure to import competition, based on shipping costs. We find that output and employment in high exposure industries is more sensitive to tariff cuts than in low exposure industries, consistent with the idea that they face a higher risk of being displaced by import competition. We then show that high exposure industries have a higher cost of capital. We confirm displacement risk of import competition is priced and covaries with the marginal utility of the representative agent.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2015/paper_898.pdf (application/pdf)

Related works:
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:red:sed015:898

Access Statistics for this paper

More papers in 2015 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().