Note that the IELM seminar will take place on Mondays, from 12:45 to 1:45 pm from January 2022 onward.

Robert Gold

Monday, October 18, 2021 – 1pm-2pm

Onsite Seminar (Room 116, MSE)

To Russia with Love? Sanctions’ Impact on Elections

Robert Gold

(Kiel Institute for the World Economy)

co-authored with Julian Hinz (Bielefeld University) and Michele Valsecchi (New Economic School)

Do economic sanctions decrease internal support of sanctioned countries’ governments? To answer this question, we focus on the sanctions imposed on Russia after 2014 and identify their effect on voting behavior in both presidential and parliamentary elections. On the economic side, the sanctions significantly hurt Russia’s foreign trade, but with regional-level variation. For identification, we derive counterfactual regional-level trade flows from a full-general-equilibrium gravity model. Observed deviations from the counterfactual causally assess sanction effects. DiD-Estimations reveal that regime support significantly increased in response to the sanctions, at the expense of voting support of communist and nationalist parties. Indeed, 39 percent of the increase in the vote shares of president Putin and his party can be explained by the sanctions’ trade effects. Placebo estimations confirm the validity of our identifying assumptions.

Anindya S. Chakrabarty

Thursday, October 14, 2021 – 3pm-4pm

Online Seminar (ZOOM)
Jointly organized with the CES research group “Networks and Games”

Link: https://zoom.univ-paris1.fr/j/99093730840?pwd=Z2wxSDVUWVg4VXZtL1lMMW1SNGVaUT09

Meeting ID: 990 9373 0840
Meeting Password: 634305

Granular Origin of Comovement in Fluctuations

Anindya S. Chakrabarty
(Indian Institute of Management)

co-authored with Shekhar Tomar (Indian School of Business)

We study the origin of comovement in economic fluctuations across regions in India through a unique administrative dataset on plant-level sales. Regional sales exhibit a high level of comovement that can be traced to a small number of large plants located in different regions, indicating a granular nature of regional comovement. Quantitatively, the top 10 plants from each region explain almost two-thirds of the total variation in regional comovement. We test three channels for comovement, viz. through aggregate regional trade, large granular plants, or granular multi-plant firms located in different regions. We find that inter-region sales of multi-plant firms is the most dominant factor behind regional comovement and subsumes both aggregate trade and plant-level effects.

Clément Nedoncelle

Monday, October 4, 2021 – 1pm-2pm

Onsite Seminar (Room 116, MSE)

Temperatures, Firm Size and Exports in Developing Countries

Clément Nedoncelle

(Paris-Saclay University, INRAE)

co-authored with Julien Wolfersberger (Climate Economics Chair)

We study how temperature shocks affect firm-level and aggregate exports in developing countries. Using exhaustive export data at the firm level for a set of 10 developing countries, whereas the average effect of temperature rise on exports is negative, small firms are disproportionately harmed compared with others. This feature is robust across sub-samples, specification matters and confounding factors. We show that this heterogeneity across firms has aggregate implications. In particular, we find that the overall deterring effect of temperature would be 35% larger in absence of the largest-exporting firms within a country. We also show that firm structure matters for exports under future climate change scenarios, with large firms reducing the costs of predicted temperature rise. We conclude that the concentration of market shares across exporters could act as a potential tool for climate mitigation in development policies.

The paper is available here: https://drive.google.com/file/d/1ArrAyLHzKxChOyHYlq9mCfBUqOv1Y2Q5/view

Arnold Njike

Monday, September 20, 2021 – 1pm-2pm

Onsite Seminar (Room 116, MSE)

The impact of financial constraints on African exports

Arnold Njike

(Paris 1, CES)

In 2019, according to the world bank, the domestic credit to GDP ratio was 144% for OECD countries while it was just 44% for Subsaharan African countries. The latter, therefore, face stringent financial constraints that are detrimental to their economic performance in different areas. Particularly, financial constraints impede the access of African firms to critical capital goods required to improve the quality and competitiveness of their products, and more generally the access to advanced economies markets because of high entry costs. These financial constraints, therefore, have the potential to limit the export performance of Subsaharan African countries, especially when it comes to final goods. It is because these goods require additional investments in terms of packaging and marketing for instance. I show in this paper that African countries export significantly less final goods than intermediate goods in comparison to other countries and that their financial constraints explain at least 30% of the difference in export performance with other countries. It shows that improving access to credit in African countries could substantially improve their trade performance.

Julian Hinz

Monday, June 21, 2021 – 1pm-2pm

Online Seminar (ZOOM)

Link: https://zoom.univ-paris1.fr/j/93108492223?pwd=Q1V0bHNveDdOdHFTUmpDSTNCM1hPdz09

Meeting ID: 931 0849 2223
Meeting Password: 036385

State Dependence and Unobserved Heterogeneity in the Extensive Margin of Trade

Julian Hinz
(Bielefeld Uni & IfW)

co-authored with Amrei Stammann (Ruhr-University) and Joschka Wanner (University of Postdam)

We study the role and drivers of persistence in the extensive margin of bilateral trade. Motivated by a stylized heterogeneous firms model of international trade with market entry costs, we consider three-way fixed effects binary choice models and study the corresponding incidental parameter problem. The standard maximum likelihood estimator is consistent under asymptotics where all panel dimensions grow at a constant rate, but it has an asymptotic bias in its limiting distribution, invalidating inference even in situations where the bias appears to be small. Thus, we propose two different bias-corrected estimators. Monte Carlo simulations confirm their desirable statistical properties. A reassessment of the most commonly studied determinants of the extensive margin of trade demonstrates that both true state dependence and unobserved heterogeneity contribute strongly to trade persistence and that taking this persistence into account matters significantly in identifying the effects of trade policies on the extensive margin.

Julie Lochard

Monday, May 10, 2021 – 1pm-2pm

Online Seminar (ZOOM)

Link: https://zoom.univ-paris1.fr/j/93108492223?pwd=Q1V0bHNveDdOdHFTUmpDSTNCM1hPdz09

Meeting ID: 931 0849 2223
Meeting Password: 036385

Global Value Chains: do they impact the allocation of foreign aid?

Julie Lochard
(ERUDITE, Université Paris Est Créteil et Economie Publique, INRAe)

co-authored with Basak Bayramoglu (Economie Publique, INRAe) and Jean-François Jacques (ERUDITE, Université Gustave Eiffel)

The rise of Global Value Chains (GVCs) in recent decades has induced significant changes in the organization and geography of world production, with consequences for bilateral and multilateral trade relations. In this paper, we investigate whether GVC-related bilateral trade is a driver of foreign aid allocation to developing countries. Using panel data on bilateral foreign aid from 22 donors to 127 recipient countries over the period 2000-2018, we find that a rise in the share of foreign value-added from a recipient country in donors’ exports increases the amount of aid allocated to that country. We also undertake a country and sectoral decomposition to analyze whether donors’ dependence on foreign value added is stronger for some countries or in specific sectors. Our results, robust to endogeneity, suggest that donors allocate aid strategically, especially in some sectors, in order to secure supplies of specific goods and services or to negotiate lower prices and better bilateral contracts.

Sandra Poncet

Monday, April 12, 2021 – 1pm-2pm

Online Seminar (ZOOM)

Link: https://zoom.univ-paris1.fr/j/93108492223?pwd=Q1V0bHNveDdOdHFTUmpDSTNCM1hPdz09

Meeting ID: 931 0849 2223
Meeting Password: 036385

Demand for ethics in the fashion industry after the Rana Plaza collapse

Sandra Poncet
(PSE, University of Paris 1)

co-authored with Pamina Koenig (PSE, University of Rouen)

This paper analyzes the effects of a major reputational shock affecting apparel companies. The collapse of the Rana Plaza building in April 2013 generated a surge of activism and media coverage around the world specifically targeting the firms that sourced from the factories affected by the disaster. We combine company-level sales data in 47 countries between 2008 and 2017 and the number of news articles published in these countries that associated each company to the scandal. We use a difference-in-differences approach to investigate a possible consumer sanction against the companies cited for subcontracting with factories located in the Rana Plaza. We do not observe any effect specific to the Rana companies that would signal an unconditional sanction by consumers over the world. However, we identify a relative decline in the sales of Rana companies proportional to the local media coverage associating them with the disaster suggesting that local media are able to influence consumer choices by relaying specific information about the actions of companies.

Enxhi Tresa

Monday, March 29, 2021 – 1pm-2pm

Online Seminar (ZOOM)

Link: https://zoom.univ-paris1.fr/j/93108492223?pwd=Q1V0bHNveDdOdHFTUmpDSTNCM1hPdz09

Meeting ID: 931 0849 2223
Meeting Password: 036385

Firm heterogeneity and trade in services

Enxhi Tresa
(THEMA, CY Cergy Paris University)

Services account for two thirds of world GDP and have an increasing role in trade and employment. In this paper, we use data from the Complementary Survey on International Trade in Services (ECEIS) for French firms and match it with French Custom data and balance sheet information from FIBEn. The main objective of the paper is to provide new insights about performance of French firms that trade in services: (i) in the import side, to identify heterogeneities in terms of imports of services and the sourcing mode (i.e. intra or inter-group); (ii) on the export side, look at the effect of exporting services together with goods on firms’ performance. We find that an increase of service imports is associated to an increase in exports. Regarding the sourcing mode, firms that import services intra-group export more, compared to firms that outsource from arms’ length. On the export side, in line with an existing literature, we find that bi-exporters (i.e. firms exporting goods and services), are more competitive.

Monday, March 15, 2021 – 1pm-2pm

Online Seminar (ZOOM)

Link: https://zoom.univ-paris1.fr/j/93108492223?pwd=Q1V0bHNveDdOdHFTUmpDSTNCM1hPdz09

Meeting ID: 931 0849 2223
Meeting Password: 036385

Maria Bas
(University of Paris 1)

co-authored with Ana Fernandes (World Bank) and Caroline Paunov (OECD)

How resilient was trade to COVID-19?
The effects of China, technology and labour intensity

In this study we test the vulnerability of trade to the early phase of the COVID-19 pandemic considering measures that capture sectoral labor intensity of production, dependence on inputs for which China is a dominant supplier, and complexity and innovation-intensity. We rely on global data on monthly trade flows from all countries in the world to four large destination markets: the United States, Japan, Germany, and France over the period January 2016-July 2020. We estimate difference-in-differences specifications including interaction terms between measures of COVID-19 incidence (deaths per capita) and containment policies (lockdown) and the production vulnerability measures and a stringent set of fixed effects.