Essays in international trade

• Main Author: Pupato, German Pablo
• Language: English
• Published: University of British Columbia 2011
• Online Access: http://hdl.handle.net/2429/33847

This dissertation consists of three chapters in the eld of international trade. The rst two, jointly written with Matilde Bombardini and Giovanni Gallipoli, explore the role of skill dispersion as a source of comparative advantage. The first chapter presents a tractable multi-country, multi-sector model of trade with search frictions in which comparative advantage derives from (i) cross-sectoral differences in the substitutability of workers’ skills and (ii) cross-country differences in the dispersion of skills in the working population. We provide conditions under which higher skill dispersion triggers specialization in sectors characterized by higher substitutability among workers’ skills. The second chapter explores the empirical relevance of skill dispersion as a determinant of the pattern of trade across industries. The analysis relies on microdata from the International Adult Literacy Survey to construct measures of skill dispersion. Results indicate that the latter has a significant effect on the pattern of trade across industries, of a magnitude comparable to the aggregate endowments of human and physical capital. The result is robust to the controls for other proximate causes of comparative advantage, such as institutional quality and flexibility of labour markets. The third chapter offers a relatively unconventional approach to the empirical analysis of the factors that determine export decisions at the firm level, by exploring whether the characteristics of firms geographically located close to each other play a role in shaping their individual entry decisions. In particular, I develop an empirical framework to study whether export participation decisions of individual firms are influenced by non-market interactions (e.g. learning or imitation) with firms that belong to a common reference group. The main testable hypothesis is that, in the presence of entry costs, group composition affects the degree of state dependence of individual export decisions. This proposition is tested by applying a dynamic panel data estimator to a data set of Argentine manufacturing firms. The findings show that group composition influences individual export decisions. Most of this effect is channelled through entry costs. Firms benefit from proximity to productive firms but not from proximity to other exporters.