Three Essays on International Trade

The dissertation consists of three chapters on international trade. The first chapter develops an estimation procedure to identify the partial effects of the GATT/WTO membership on variable and fixed trade costs, respectively. This procedure extends the techniques of Anderson and Van Wincoop (2003) on the structural relationship of multilateral resistance terms and of Helpman, Melitz and Rubinstein (2008) on the structural modeling of trade incidence. We then develop a general equilibrium framework to simulate the impact of variable, fixed, and total trade cost changes on the firm-level trade structure, the bilateral trade flow, and the aggregate welfare due to the GATT/WTO system from 1978–2015.　The second chapter develops a dynamic model characterizing firms’ choice of sourcing countries for intermediate inputs. This model incorporates both communication cost and uncertainty, which are lower when firms source from countries that the firm has previously engaged suppliers from. Using the developed structure, the paper estimates the benefits of importing from familiar sets of countries, measured by the improvement in the probability of receiving satisfactory inputs. The third chapter develops a heterogeneous firm-productivity model à la Melitz (2003) such that firms face both agency problem internally and financial constraints externally. Conditional on the same raw productivity draw, managers of potential exporting firms around the export cutoff in financially underdeveloped countries exert more effort than their counterparts in financially developed countries, so as to induce their owners to export. We find clear empirical evidence for this theoretical prediction, using the World Management Survey data.