Felix Tintelnot, University of Chicago
Department seminar. Felix Tintelnot is an Assistant Professor at the University of Chicago. He will present a paper entitled "Trade and Domestic Production Networks", co-authored by Ayumu Ken Kikkawa, Magne Mogstad and Emmanuel Dhyne.
We use administrative data from Belgium with information on domestic ﬁrm-to-ﬁrm sales and foreign trade transactions to study how international trade aﬀects ﬁrm eﬃciency and real wages. The data allow us to construct the buyer-supplier network of the Belgian economy. We document that most ﬁrms that do not directly import or export still have large indirect exposure to foreign trade, and that a ﬁrm’s output is aﬀected by idiosyncratic shocks to its buyers and suppliers. These empirical ﬁndings motivate and guide the development of a model with domestic production networks and international trade. We obtain new suﬃcient statistics results for the eﬀects of trade in a model with ﬁxed network structure, and we develop a tractable model of endogenous domestic production networks. Comparing our results to those we obtain using existing approaches highlights the importance of data on and modeling of domestic production networks in studies of international trade.
Host: Andreas Moxnes