Essays on the Macroeconomic Implications of Globalization

Chapter 1: Multinational Production and Global Shock Propagation during the Great RecessionBoth international trade and multinational production (MP) collapsed during the Great Recession. What fundamentals explained the MP and trade collapse? I answer the question with a model of MP, trade, and sectoral linkages. I highlight the frictions multinational enterprises (MNEs) face when they source from and sell to non-headquarters countries. These parameters govern MNEs' vertical/horizontal-ness and render the rich interactions between MP and trade. I consider two possible sources of the MP collapse: compared to local producers, (1) MNEs respond more adversely to the trade collapse and the decline in durable final demand and (2) MNEs are affected by different shocks (MNE-specific shocks). MNE-specific shocks include those that affect MNEs' productivity relative to local producers and their vertical/horizontal-ness. I find that 71% of cross-country variation in multinational foreign affiliate sales decline and 19% of cross-country variation in trade decline, both relative to GDP, can be explained by MNE-specific shocks. MNE-specific shocks that hit a few important headquarters and host countries propagate worldwide and explain much of the MP collapse. However, sectoral final demand shocks to almost all countries are necessary to explain a significant share of the trade collapse. Chapter 2: The Employment Consequences of Anti-Dumping Tariffs: Lessons from Brazil (with Gustavo De Souza)Can anti-dumping tariffs increase employment? To answer this question, we compile data on all anti-dumping (AD) investigations in Brazil, matched to firm-level administrative employment information. Using difference-in-differences, we estimate the effect of AD tariffs on trade, the national supplier and sectors linked to it. In response to an AD tariff, import decreases and employment increases in the protected sector. Moreover, downstream firms decrease employment by more than the employment gains of the national producers while upstream ones dramatically increase it. To quantify the aggregate effect of these tariffs, we build a quantitative model with international trade, input-output linkages, and labor force participation. The model can reproduce the micro-elasticities we found and aggregate moments of the Brazilian economy. We show that the Brazilian AD policies increase employment by 0.04%, GDP by 0.04%, but decrease welfare by 0.09%. Chapter 3: The Life-Cycle Dynamics of Exporters and Multinational Firms (with Anna Gumpert, Andreas Moxnes, Natalia Ramondo and Felix Tintelnot)This paper studies the life-cycle dynamics of exporters and multinational enterprises (MNEs). Using rich firm-level data, we document a comprehensive set of facts on entry, exit, and growth of new exporters and new MNEs. Guided by these facts, we build a model based on the standard proximity-concentration trade-off extended to incorporate time-varying firm productivity and sunk costs of MNE entry. The calibrated version of the model goes far in matching cross-sectional and dynamic moments of the data on exporters and MNEs. Our results point to much higher sunk costs for MNE than for export activities. Finally, we show how including the choice to become an MNE affects the predicted export dynamics after a trade liberalization episode