Research
- Multi-product Firms and Trade Liberalizations: A Dynamic Model of Entry, Exit, Growth, and Export[pdf]
- Global Sourcing and Credit Constraint [pdf]
- Aging, Social Capital, and Health Care Utilization in Canada [pdf]
- City Size, Aging, Social Capital and Utilization of Health Services[pdf]
- Export Quality, Product Mix, and Growth
- Financial Dependence and Growth: A Semi-parametric Approach
- Export Growth and Technology Transfer through Intra-firm Trade
- FDI, Intra-firm Trade, and Wage Distribution
This paper estimates a dynamic general equilibrium model of entry, exit, and endogenous productivity growth. Productivity is endogenous both at the industry level (firms enter and exit) and at the firm level (firms invest in productivity-enhancing activities). The focus of the paper is on two activities that make productivity-enhancing investments more attractive, namely, exporting and product-mix choices. A firm that increases its exports and/or its number of products will have higher sales -- and this makes investing in productivity more attractive because there are more units (sales) across which the productivity gains can be applied. Restated, exporting and product-mix choices raise productivity, but only indirectly by making investing in productivity more attractive. These insights are taken to firm-level Spanish data. We compute the Markov Perfect Equilibrium using a nested pseudo maximum likelihood estimator (NPL) with dynamic programming algorithms. Two key findings emerge. First, there is no evidence of learning by exporting: the observed positive correlation between exporting and productivity operates entirely via the impact of exporting on productivity-enhancing investments. Second, there is a strong complementarity between the product-mix and investment decisions. Finally, we simulate the effects of reductions in foreign tariffs. This increases exporting, investing and wages; and wage increases cause a reduction in the number of products per firm. Productivity rises at the economy-wide level both because of the selection effect and because of firm-level increases in productivity.
I extend the Antras and Helpman (2004) model of the international organization of production to incorporate the role of credit constraint in the presence of financial frictions. A continuum of final- good producers with heterogeneous productivities decide to integrate or outsource the intermediate inputs and in which countries to source the inputs. In the model, under outsourcing, the intermediate supplier has to finance the mixed organization costs, whereas under vertical integration, the burden lies on the final good producer. Firms in some sectors need to finance a greater share of their costs externally. In addition, sectors differ in their endowment of tangible assets that can serve as collateral. Final-good producers in some sectors find it easier to operate because they need to raise less outside finance and have more tangible assets. Credit constraints vary across countries because contracts between firms and investors are more likely to be enforced at higher levels of financial development. This model generates equilibria in which firms with different productivity levels choose different ownership structure and suppliers location. I study the effect of improvements in financial contractibility on the relative prevalence of organizational forms. An improvement in financial contractibility in one country decreases the market share of vertically integrated firms in that country, this effect is more pronounced in the financially vulnerable sector, i.e. the sectors that are more dependent on outside finance and have less tangible assets. Second, the more financial developed a country is, the greater is the variety of products final good producers choose to outsource the intermediate inputs to that country. This effect is more pronounced in the financial vulnerable sector. I provide empirical results to support the theoretical predictions.
Abstract: This paper examines relationships between aging, social capital, and healthcare utilization. Cross-sectional data from the 2001 Canadian Community Health Survey and the Canadian Census are used to estimate a two-part model for both GP physicians (visits) and hospitalization (annual nights) focusing on the impact of community- (CSC) and individual-level social capital (ISC). Quantile regressions were also performed for GP visits. CSC is measured using the Petris Social Capital Index (PSCI) based on employment levels in religious and community-based organizations [NAICS 813XX] and ISC is based on selfreported connectedness to community. A higher CSC/lower ISC is associated with a lower propensity for GP visits/higher propensity for hospital utilization among seniors. The part-two (intensity model) results indicated that a one standard deviation increase (0.13%) in the PSCI index leads to an overall 5% decrease in GP visits and an annual offset in Canada of approximately $225 M. The ISC impact was smaller; however, neither measure was significant in the hospital intensity models. ISC mainly impacted the lower quantiles in which there was a positive association with GP utilization, while the impact of CSC was strongest in the middle quantiles. Each form of social capital likely operates through a different mechanism: ISC perhaps serves an enabling role by improving access (e.g. transportation services), while CSC serves to obviate some physician visits that may involve counseling/caring services most important to seniors. Policy implications of these results are discussed herein.
This paper examines relationships between aging, social capital, and healthcare utilization. Survey data from the 2002 Canadian Community Health Survey (wave 1.2) and the 2001 Canadian Census are merged with GP visit data from the Ontario Ministry of Health and Long Term Care for FY 2006 to estimate a negative binomial regression model focusing on the impact of community- (CSC) and individual-level social capital (ISC). CSC is measured using the Petris Social Capital Index (PSCI) based on employment levels in religious and community-based organizations [NAICS 813XX] and three different measures used for ISC. The regression results indicate differential results based on whether a person lives in a census metropolitan area (>100,000) or a smaller community (population 10,000 ¨C 100,000). A one standard deviation increase (0.08%) in the PSCI index in these larger communities leads to a 2.6% decrease in GP visits and an annual offset in Ontario of approximately $62.3 M. In smaller communities, CSC exhibited no significant impact upon utilization, but higher levels of ISC were associated with fewer annual GP visits. Each form of social capital likely operates through a different mechanism and differentially by community size. Stronger CSC likely obviates some physician visits in larger communities that may involve counseling/caring services while some forms of ISC may act similarly in smaller communities. Policy implications of these results are discussed herein.
Working Papers
This paper analyzes the growth and specialization patterns for developing countries by reference to a model in which firms and countries differ both in productivity and quality. The model implies that there is a lower bound to quality below which firms cannot sell, however low the local wage rate they face. Countries can grow in two dimensions, what types of goods they produce, and at what quality levels. We construct price data from UN Com Trade over a period of 25 years to distinguish the qualities and Rodrix index to distinguish the types of goods produced. Countries that specialize in the high quality goods that poor countries export can grow just as fast as countries that specialize in the low quality goods that rich countries export.
Several recent studies analyze financial dependence and growth. Using data from Unido Industry Stats for 102 countries and 27 industries over a period of 28 years I estimate a partial linear model that pays careful attention to the financial vulnerability of an industry and the financial development of a country. I also conclude that welfare effects of financial development changes are substantially different if one estimates this effect nonparametrically rather than parametrically.