Results

Blog

VoxEU:

Firms slice up global production to protect their knowhow

Imitation is a first-order concern for enterprises operating global production processes. Firms routinely source knowledge-intensive inputs from many countries, including those with weak intellectual property laws. This ...Read more...

Journal article

Review of World Economics:

The changing structure of global value chains and technological change: evidence from the firm-level patent data

This paper explores how changes in the relative position in the Global Value Chains (GVCs) affect firms? innovation activities. The analysis combines matched patent-firm data with information on GVC networks from the OEC...Read more...

CEP discussion paper

Peer effects and worker visibility in team production: evidence from NBA rookies

This paper examines how peer quality impacts early career visibility, productivity, and longterm earnings in team based settings. While high ability peers can generate positive spillovers, they may limit opportunities fo...Read more...

Journal article

Journal of Law, Economics, and Organization:

Business groups as knowledge-based hierarchies of firms

We provide the first worldwide overview of the patterns of hierarchical differentiation across Business Groups (BGs), highlighting the coexistence of different hierarchical shapes. We show how the different shapes can ar...Read more...

Journal article

The Energy Journal:

Natural gas vehicles: consequences for fuel markets and the environment

Policies to adopt cleaner fuels have become increasingly important, but their impacts on incumbent fuel prices and resulting greenhouse gas emissions remain unclear. We use a panel dataset on weekly prices at the gas sta...Read more...

Blog

Imperial College Business School:

How protectionism risks undermining the US economy

Donald Trump's announcement of wide-ranging tariffs has threatened to upend the rules of global trade that have been in place for decades, impacting supply chains and businesses across the world. The US President's pla...Read more...

Journal article

The Economic Journal:

Service offshoring and export experience

Service inputs significantly influence export costs and firm internationalisation. A new dataset on French firms? participation in global value chains reveals that experienced exporters are more likely to source services...Read more...

CEP discussion paper

Productivity, matchability and intermediation in production networks

This paper examines intermediation in production networks to unpack the firm attributes and matching costs that govern firm-to-firm networks and the gains from trade. Exploiting rich customs data for Chile, we show that ...Read more...

CEP discussion paper

Large-scale land acquisitions: Trees, trade and structural change

Large-scale land acquisitions are a key component of agricultural foreign direct investment. In 2023 alone, nearly 6% of the world's arable land was acquired globally. This paper examines their impact on agricultural pro...Read more...

Journal article

American Economic Journal: Applied Economics:

Do carbon offsets offset carbon?

We develop and implement a new method for identifying wasted subsidies and use it to provide systematic evidence of the misallocation of carbon offsets in the Clean Development Mechanism - the world's largest carbon offs...Read more...

Journal article

International Economic Review:

Productive robots and industrial employment: the role of national innovation systems

In a model with robots, automatable and non-automatable production, we study robot-labor substitutions and show how they are influenced by a country's "innovation system". Substitution depends on demand and production el...Read more...

Journal article

American Economic Journal: Macroeconomics:

International friends and enemies

We examine whether, as countries become more economically dependent on a trade partner, they realign politically toward that trade partner. We use network measures of economic exposure to foreign productivity growth deri...Read more...

CEP discussion paper

Firm heterogeneity and imperfect competition in global production networks

How do production networks and market structure interact to shape the effects of trade and competition policy? We develop a model with two-sided firm heterogeneity, matching frictions, and imperfect supplier competition....Read more...

CEP discussion paper

Production function estimation using subjective expectations data

Standard proxy methods for estimating production functions in the Olley and Pakes (1996) tradition require assumptions on input choices. We introduce a new method that exploits (increasingly available) data on firms' exp...Read more...

Journal article

Journal of Business Venturing:

A framework for investigating new firm entry: the (limited) overlap between informal-formal and necessity-opportunity entrepreneurship

We analyse entrepreneurial entry along the dimensions of informal-formal and necessity-opportunity entrepreneurship, distinguishing between them yet considering them jointly. While the dominant view in the literature con...Read more...

Journal article

The Review of Economic Studies:

Does pricing carbon mitigate climate change? Firm-level evidence from the European Union Emissions Trading System

In theory, market-based regulatory instruments correct market failures at least cost. However, evidence on their efficacy remains scarce. Using administrative data, we estimate that, on average, the European Union Emissi...Read more...

CEP discussion paper

Accounting for the evolution of China's production and trade patterns

This paper studies the evolution of China's production and trade patterns during its integration into the global economy. We document and explain new facts concerning changes in production and exports at the industry and...Read more...

Journal article

Regional Studies:

Global production networks meets evolutionary economic geography

Two of the canonical approaches in regional studies are global production networks (GPNs) and evolutionary economic geography (EEG). Recent geopolitical and economic events have shown the importance of both theories in e...Read more...

Journal article

Journal of the European Economic Association:

Come together: firm boundaries and delegation

We jointly study firm boundaries and the allocation of decision rights within them by confronting an incomplete-contracts model with data on vertical integration and delegation for thousands of firms around the world. In...Read more...

Journal article

American Economic Journal: Economic Policy :

Local retail prices, product variety, and neighborhood change

We study how local grocery markets within a city are affected by changes in housing markets. Our empirical strategy exploits a shift in the spatial distribution of construction activity induced by a large-scale, place-ba...Read more...

Journal article

American Economic Review :

The impact of regulation on innovation

We present a framework that can be used to assess the equilibrium impact of regulation on endogenous innovation with heterogeneous firms. We implement this model using French firm-level panel data, where there is a sharp...Read more...

CentrePiece article

Geopolitics and the electric vehicle revolution

Rising demand for electric vehicles (EVs) is changing the geopolitical landscape, as the world pivots away from fossil fuels towards the green minerals critical to the EV supply chain. Benjamin Jones, Viet Nguyen-Tien, R...Read more...

Journal article

The Economic Journal:

Unraveling firms: demand, productivity and markups heterogeneity

We develop a novel framework that simultaneously allows recovering heterogeneity in demand, quantity TFP and markups across firms while leaving the correlation between the three dimensions unrestricted. We accomplish thi...Read more...

Blog

Trade Talks:

Did responsible sourcing by multinationals help workers in poor countries? (podcast)

A series of industrial accidents that killed workers in the supply chains of multinational corporations triggered backlash by Western consumers. In response, many global companies committed to treat workers in poor count...Read more...

Journal article

Research Policy:

Global value chains and domestic innovation

This paper explores how changes in both position and participation in Global Value Chain (GVC) networks affect firm innovation. The analysis combines matched patent-firm data for Japan with measures of GVC network centra...Read more...

Blog

FRBSF Economic Letter:

Supply Chain Disruptions, Trade Costs, and Labor Markets

Global supply chain disruptions due to the Covid-19 pandemic have increased the costs of trade between countries. Given the interconnectedness of the US economy with the rest of the world, higher trade costs can have imp...Read more...

Blog

Vox EU:

Tracking uncertainty in a rapidly changing global economic outlook

Tracking uncertainty at a high frequency is useful in the context of the multiple shocks that have hit the global economy over the past years and to disentangle the sources of uncertainty. This column presents a new mont...Read more...

Journal article

The World Economy:

The electric vehicle revolution: critical material supply chains, trade and development

The emergence of a mass market for electric vehicles (EVs) offers development opportunities for countries that have abundant resources of cobalt, nickel, lithium, copper, aluminium and manganese. Not surprisingly, develo...Read more...

Blog

Vox Dev:

Responsible sourcing? Theory and evidence from Costa Rica

The authors investigate whether responsible sourcing policies implemented by multinational enterprises for their suppliers have impacts on the ground and, if they do, what these mean for firms and workers in the host cou...Read more...

Blog

Vox EU:

Financial crises as drivers of populism: a new channel

Financial crises have severe economic costs. This column shows that they also entail major political costs. It argues that the global financial crisis, and associated Great Recession, represents a watershed for populism ...Read more...

Journal article

Journal of Political Economy:

The origins of firm heterogeneity: a production network approach

We explore firm size heterogeneity in production networks. In comprehensive data for Belgium, firms with more customers have higher total sales but lower sales and lower market shares per customer. Downstream factors, es...Read more...

Journal article

Annual Review of Economics :

Risks and global supply chains: what we know and what we need to know

Recent supply disruptions catapulted the issue of risk in global supply chains (GSCs) to the top of policy agendas and created the impression that shortages would have been less severe if GSCs had been either shorter and...Read more...

Journal article

Management Science:

Vertical integration and foreclosure: evidence from production network data

This paper studies the prevalence of potential anticompetitive effects of vertical mergers using a novel data set on U.S. and international buyer-seller relationships and across a large range of industries. We find that ...Read more...

CEP discussion paper

Technology transfer in global value chains

Firm-to-firm relationships in global value chains create opportunities for North-South technology diffusion. This paper studies technology transfer in value chains when contracts are incomplete and in-put production tech...Read more...

CEP discussion paper

Business groups as knowledge-based hierarchies of firms

Hierarchical differentiation is a cornerstone of the organizing process. In this paper, we do three things. First, exploiting a newly assembled dataset, we provide the first worldwide overview of the patterns of hierarch...Read more...

Journal article

Small Business Economics:

Homophily and peer influence in early-stage new venture informal investment

Abstract: Conceptualising early-stage new venture informal investors as co-entrepreneurs whose actions are socially embedded, we examine the role of social influence and how it interplays with entrepreneurial experience ...Read more...

Blog

Vox EU:

Service offshoring and export experience

Trade in services is important but difficult to measure. This column introduces a new dataset that helps understand the contribution of services to global value chains and their role in the process of exporting goods. Fi...Read more...

CEP discussion paper

Service offshoring and export experience

Service inputs are a key component of the costs of exporting, and contribute to explain the process of internationalization of firms. A new dataset on the participation of French firms in global value chains reveals that...Read more...

Journal article

Journal of Environmental Economics and Management:

Green product innovation in industrial networks: a theoretical model

Previous studies have modeled green technological change as innovations in the process of production (e.g., abatement technologies or energy sources). But greening the economy also requires changing products. The automot...Read more...

Journal article

European Economic Review:

Global banking: endogenous competition and risk taking

When banks expand abroad, their riskiness decreases if foreign expansion happens in destination countries that are more competitive than their origin countries. We reach this conclusion in three steps. First, we develop ...Read more...

CEP discussion paper

Globalization, trade imbalances and labor market adjustment

We study the role of global trade imbalances in shaping the adjustment dynamics in response to trade shocks. We build and estimate a general equilibrium, multi-country, multi-sector model of trade with two key ingredient...Read more...

Blog

LSE US Centre:

Trade protection along supply chains: how antidumping measures against China hurt downstream industries

Production processes are often no longer confined to a single country; supply chains can be fragmented across great distances. By contrast, tariffs are often used by individual countries to protect certain industries. In...Read more...

CEP discussion paper

Pandemics, global supply chains and local labor demand: evidence from 100 million posted jobs in China

This paper studies how the COVID-19 pandemic has affected labor demand, using over 100 million posted jobs on one of the largest online platforms in China. Our data reveal that the number of newly posted jobs within the ...Read more...

Journal article

Quarterly Journal of Economics:

Misallocation in the market for inputs: enforcement and the organization of production

The strength of contract enforcement determines how firms source inputs and organize production. Using microdata on Indian manufacturing plants, we show that production and sourcing decisions appear systematically distor...Read more...

CEP discussion paper

Work, care and gender during the Covid-19 crisis

We explore impacts of the pandemic crisis and associated restrictions to economic activity on paid and unpaid work for men and women in the UK. Using data from the Covid-19 supplement of Understanding Society, we find ev...Read more...

CEP discussion paper

Growing like China: firm performance and global production line position

Global value chains have fundamentally transformed international trade and development in recent decades. We use matched firm-level customs and manufacturing survey data, together with Input-Output tables for China, to e...Read more...

CEP discussion paper

Managing global production: theory and evidence from just-in-time supply chains

Global value chains are highly fragmented across countries and dominated by a few large multinational firms. But the challenges of an increasingly difficult international business environment are raising the question of ...Read more...

CEP discussion paper

Intellectual property and the organization of the global value chain

This paper introduces the concept of intangible assets in a property rights model of sequential supply chains. Firms transmit knowledge to their suppliers to facilitate input customization. Yet, to avoid knowledge dissip...Read more...

CEP discussion paper

Vertical integration and foreclosure: evidence from production network data

This paper studies the prevalence of vertical market foreclosure using a novel dataset on U.S. and international buyer-seller relationships, and across a large range of industries. We find that relationships are more lik...Read more...

CEP discussion paper

Economic incentives, home production and gender identity norms

We infer the role of gender identity norms from the reallocation of childcare across parents, following changes in their relative wages. By exploiting variation from a Swedish tax reform, we estimate the elasticity of su...Read more...

Journal article

Journal of Political Economy:

Production networks, geography, and firm performance

This paper examines the importance of buyer-supplier relationships for firm performance. We develop a model in which firms outsource tasks and search for suppliers. Lower search and outsourcing costs lead firms to search...Read more...

CEP discussion paper

International buyers' sourcing and suppliers' markups in Bangladeshi garments

Large international buyers play a key role in global value chains. We exploit detailed transaction-level data on the usage of material inputs to study how Bangladeshi garment suppliers' markups vary across international ...Read more...

CEP discussion paper

The origins of firm heterogeneity: a production network approach

This paper quantifies the origins of firm size heterogeneity when firms are interconnected in a production network. Using the universe of buyer-supplier relationships in Belgium, the paper develops a set of stylized fact...Read more...

CEP discussion paper

Misallocation in the market for inputs: enforcement and the organization of production

The strength of contract enforcement determines how firms source inputs and organize production. Using microdata on Indian manufacturing plants, we show that production and sourcing decisions appear systematically distor...Read more...

Journal article

Annual Review of Economics:

Networks and trade

Trade occurs between firms both across borders and within countries, and most trade transactions include at least one large firm with many trading partners. This article reviews the literature on firm-to-firm connections...Read more...

CentrePiece article

Threats to scientific progress, past and present

A US boycott of Chinese researchers, as threatened by the Trump administration, could stifle scientific progress and technological innovation. That is the concern of Alessandro Iaria, Carlo Schwarz and Fabian Waldinger, ...Read more...

CEP discussion paper

Networks and trade

Trade occurs between firms both across borders and within countries, and the vast majority of trade transactions includes at least one large firm with many trading partners. This paper reviews the literature on firm-to-f...Read more...

Journal article

Regional Science and Urban Economics:

You've come a long way, baby. Husbands' commuting time and family labour supply

This paper explores the effects of husbands? commuting time on wives? employment and family time allocation. We develop a unitary family model, and we show that when market services are imperfect substitutes of home prod...Read more...

CEP discussion paper

Internalizing global value chains: a firm-level analysis

In recent decades, advances in information and communication technology and falling trade barriers have led firms to retain within their boundaries and in their domestic economies only a subset of their production stages...Read more...

CEP discussion paper

Frontier knowledge and scientific production: evidence from the collapse of international science

We show that WWI and the subsequent boycott against Central scientists severely interrupted international scientific cooperation. After 1914, citations to recent research from abroad decreased and paper titles became les...Read more...

Journal article

American Economic Review:

Is modern technology responsible for jobless recoveries?

Since the early 1990s, recoveries from recessions in the US have been plagued by weak employment growth. We investigate whether a similar problem afflicts other developed economies, and whether technology is a culprit. W...Read more...

CEP discussion paper

International expansion and riskiness of banks

We exploit an original dataset on European G-SIBs to assess how banks? internationalization affects risk in the banking sector. We find a robust negative correlation between foreign expansion and banking risk as captured...Read more...

Journal article

Small Business Economics:

Prospect theory and the effects of bankruptcy laws on entrepreneurial aspirations

We apply prospect theory to explain how personal and corporate bankruptcy laws affect risk perceptions of entrepreneurs at time of entry and therefore their growth ambitions. Previous theories have reached ambiguous conc...Read more...

Journal article

Oxford Economic Papers:

Strategic uncertainty, indeterminacy, and the formation of international environmental agreements

Since the end of the Kyoto Protocol, global climate negotiations have shifted away from setting binding short-run targets on emissions towards placing long-term limits on global warming. We investigate how this alters th...Read more...

CEP discussion paper

Global banking: risk taking and competition

Direct involvement of global banks in local retail activities can reduce risk-taking by promoting local competition. We develop this argument through a model in which multinational banks operate simultaneously in differe...Read more...

Journal article

Regional Studies:

Global investments and regional development trajectories: the missing links

Global investments and regional development trajectories: the missing links. Regional Studies. Regional economic development has been long conceptualized as a non-linear, interactive and socially embedded process: these ...Read more...

CEP discussion paper

The loss of production work: evidence from quasi-experimental identification of labour demand functions

This paper examines changes in the structure of labour demand in plant-level panel data. I exploit variation in wages across local labour markets induced by the collapse of Finland?s Soviet-dependent industry in the earl...Read more...

CEP discussion paper

Production networks, geography and firm performance

This paper examines the importance of buyer-supplier relationships, geography and the structure of the production network in firm performance. We develop a simple model where firms can outsource tasks and search for supp...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Enabled to Work: The Impact of Government Housing on Slum Dwellers in South Africa

This paper looks at the link between housing conditions and household income and labour market participation in South Africa. I use four waves of panel data from 2002-2009 on households that were originally living in inf...Read more...

Journal article

Journal of International Economics:

How firms export: processing vs. ordinary trade with financial frictions

The fragmentation of production across borders allows firms to make and export final goods, or to perform only intermediate stages of production by processing imported inputs for re-exporting. We examine how financial fr...Read more...

CEP discussion paper

Unraveling firms: demand, productivity and markups heterogeneity

We develop a novel framework that simultaneously allows recovering heterogeneity in demand, quantity TFP and markups across firms while leaving the correlation between the three dimensions unrestricted. We accomplish thi...Read more...

CEP discussion paper

How firms export: processing vs. ordinary trade with financial frictions

The fragmentation of production across borders allows firms to make and export final goods, or to perform only intermediate stages of production by processing imported inputs for re-exporting. We examine how financial fr...Read more...

Journal article

American Economic Review:

Industry compensation under relocation risk: a firm-level analysis of the EU emissions trading scheme

When regulated firms are offered compensation to prevent them from relocating, efficiency requires that payments be distributed across firms so as to equalize marginal relocation probabilities, weighted by the damage cau...Read more...

Journal article

American Economic Review:

Market size, competition, and the product mix of exporters

We build a theoretical model of multi-product firms that highlights how competition across market destinations affects both a firm's exported product range and product mix. We show how tougher competition in an export ma...Read more...

CEP discussion paper

Missing gains from trade?

The theoretical result that there are welfare gains from trade is a central tenet of international economics. In a class of trade models that satisfy a 'gravity equation,' the welfare gains from trade can be computed usi...Read more...

Journal article

American Economic Review:

Immigration, offshoring, and American jobs

Following Grossman and Rossi-Hansberg (2008) we present a model in which tasks of varying complexity are matched to workers of varying skill in order to develop and test predictions regarding the effects of immigration a...Read more...

CEP discussion paper

Female Employment and Fertility - The Effects of Rising Female Wages

Increases in female employment and falling fertility rates have often been linked to rising female wages. However, over the last 30 years the US total fertility rate has been fairly stable while female wages have continu...Read more...

CEP discussion paper

Immigration, Offshoring and American Jobs

How do offshoring and immigration affect the employment of native workers? What kinds of jobs suffer, or benefit, most from the competition created by offshore and immigrant workers? In contrast to the existing literatur...Read more...

CEP discussion paper

Global Value Chains During the Great Trade Collapse: A Bullwhip Effect?

This paper analyzes the performance of global value chains during the trade collapse. To do so, it exploits a unique transaction-level dataset on French firms containing information on cross-border monthly transactions m...Read more...

CentrePiece article

Policy uncertainty: a new indicator

The damaging impact of economic uncertainty on growth has been reasonably well studied - but what happens when there is uncertainty about economic policy-making? Nicholas Bloom and colleagues have developed a measure of ...Read more...

CEP discussion paper

A Note on Schooling in Development Accounting

How much would output increase if underdeveloped economies were to increase their levels of schooling? We contribute to the development accounting literature by describing a nonparametric upper bound on the increase in o...Read more...

CentrePiece article

In brief... Cotton and cars: the huge gains from process innovation

New inventions are good for economic growth, but equally important are improvements in the way we make things - what's known as process innovation. Tim Leunig and Joachim Voth measure the impact of two such innovations -...Read more...

Journal article

Journal of the European Economic Association:

Rethinking the effect of immigration on wages

This paper calculates the effects of immigration on the wages of native US workers of various skill levels in two steps. In the first step we use labor demand functions to estimate the elasticity of substitution across d...Read more...

CEP discussion paper

Spinning Welfare: the Gains from Process Innovation in Cotton and Car Production

Economists and economic historians want to know how much better life is today than in the past. Fifty years ago economic historians found surprisingly small gains from 19th century US railroads, while more recently econo...Read more...

CEP discussion paper

Welfare Policy and the Distribution of Hours of Work

We examine the distribution of hours of work across industrial sectors in OECD countries. We find large disparities when sectors are divided into three groups: one that produces goods without home substitutes and two oth...Read more...

CEP discussion paper

Intra-Industry Foreign Direct Investment

We use a new firm level data set that establishes the location, ownership, and activity of 650,000 multinational subsidiaries?close to a comprehensive picture of global multinational activity. A number of patterns emerge...Read more...

CEP discussion paper

The Division of Labor, Coordination, and the Demand for Information Processing

Since Adam Smith?s time, the division of labor in production has increased significantly, while information processing has become an important part of work. This paper examines whether the need to coordinate an increasin...Read more...

CEP discussion paper

Trends in Hours and Economic Growth

We study long-run trends in market hours of work and employment shifts across economic sectors driven by uneven TFP growth in market and home production. We focus on the structural transformation between agriculture, man...Read more...

CEP discussion paper

Labor and the Market Value of the Firm

What role does labor play in a firm?s market value? We explore this question using a production-based asset pricing model with frictions in the adjustment of both capital and labor. We posit that hiring of labor is akin ...Read more...