Date of Award
Spring 2023
Document Type
Dissertation
Degree Name
Doctor of Philosophy (PhD)
Department
Economics
First Advisor
Goldberg, Penelopi
Abstract
In this dissertation I aim to contribute to the understanding of interdependence in market economies. I do so by providing new data, computational tools, and novel trade policy episodes in the service of tackling questions of economic relevance. I do this in the three chapters that comprise this work. My hope is that this data-intensive effort informs and inspires theoretical endeavors. In the first chapter, coauthored with James Williams, we address the lack of firm-level production network data. This aligns with one of the pillars of contemporary international trade literature: the pervasive notion of firm heterogeneity. Specifically, we tackle the said challenge in three ways. First, we build a set of production networks for the years 2006-2012 from unique tax administrative records from Colombia. These networks not only have broad coverage of the Colombian economy, but also have information concerning the intensity of relationships among firms – the intensive margin of connectivity. Second, we build a set of computational tools for the scalable analysis of weighted directed networks. We make available these tools to the academic community. Third, we show the intensive margin of connectivity is relevant to understand the topology of production networks. The second chapter builds on the above-mentioned data to study the diffusion of shocks. Contemporary literature has documented that firms' outcomes are affected by shocks to which they were indirectly exposed. That is, they are affected because of being a supplier/buyer of the directly exposed firm. However, the characterization of the nature of indirect effects is still an open question. In consequence, I tackle the challenge in three ways. First, I show that the indirect effects not only comprise the intensive margin of firms (i.e. a decline in sales), but also the extensive margin (i.e. firm entry and exit). Second, I find that demand shocks have different diffusion patterns relative to trade credit shocks. Third, and finally, I expose how the effects of a shock that affects trading companies – firms specialized in exporting on behalf of others – are different compared to shocks that affect direct exporters. In the third chapter I explore whether the connectivity patterns of exporters are different. Exporters have been shown to be systematically different from the rest of the firms in the economy, but there is scant evidence concerning their connectivity in domestic production networks. Specifically, I find that differences arise when distinguishing across the different exporter types. Even after considering different control variables (including size), direct exporters have a larger number of suppliers and in-centrality score. In line with their focus on foreign markets, trading companies have a considerably smaller number of buyers compared to domestic firms in the economy. Last but not least, this work is based on sensitive data from the Colombian Taxes and Customs Taxes administration (DIAN). The analyses, results, and discussion do not represent DIAN's official position and have been cleared to be used with academic purposes.
Recommended Citation
Gelvez, David, "Three Essays on International Trade and Domestic Production Networks" (2023). Yale Graduate School of Arts and Sciences Dissertations. 915.
https://elischolar.library.yale.edu/gsas_dissertations/915
