Deborah Swenson

University of California, Davis | UCD · Department of Economics

The unexpected outbreak of the U.S.-China trade war led to dramatic increases in the import and export tariffs confronting Chinese firms, and ushered in an era of unprecedented trade policy uncertainty (TPU). To assess the effects of this development on the operations of Chinese firms we adopt a new textual analysis approach to listed firms’ annual...

The United States declared trade war after substantial defections from the internationalist (in geo-strategy and economics) lobby in U.S. politics to a new coalition between conflict-is-inevitable activists and anti-globalization proponents. Many internationalist businesses changed sides after experiencing disappointments on economic fronts includi...

We study whether tariff preferences conferred on South Korean goods through the implementation of the Korea-U.S. Free Trade Agreement (KORUS) drew U.S. import demand away from other U.S. trading partners through the phenomenon known as trade diversion. In the two years following the implementation of KORUS, trade diversion was particularly strong f...

This paper studies how reduction in trade policy uncertainty affects firm export decisions. Using a firm-product level dataset on Chinese exports to the United States and the European Union in the years surrounding China's WTO accession, we provide strong evidence that reduction in trade policy uncertainty simultaneously induced firm entries to and...

This paper studies the differential effects of trade liberalization following China’s accession to the World Trade Organization. While China’s tariff liberalization was uniformly implemented as a matter of national policy, our results show that the pass-through of tariff reductions to import prices was more pronounced for products that were importe...

Although the influence of agglomeration economies on foreign direct investment location decisions is widely recognized in the literature, the nature of positive externalities is less well understood. This paper examines a particular source, access to specialized imported inputs, by applying a conditional logit model to the location decisions of Tai...

We exploit information on the geographic, product and trader characteristics of China's 1997–2009 exports to examine how the evolving city-industry presence of multinational firms influenced the quality, frequency and survival of new export transactions by private Chinese firms. Our results show that own-industry multinational firm contact was asso...

This paper studies the extent and variation in production cost pass‐through for U.S. outsourcing imports. Data from 4,676 products imported through the U.S. overseas assembly program show that outsourcing imports were characterized by incomplete pass‐through of production and trade costs to import prices. Notably, pass‐through was higher for produc...

This paper examines how changes in China's trade environment contributed to the rise in private firm exports. Data from 1997 to 2009 reveal that both increased exposure to multinational firm exports in related industries and expansion in private firm imports at the broad industry level contributed to private firm export growth. The benefits of mult...

We use data on Chinese manufacturing firms to study the connection between individual firm imports and firm export outcomes. Since our panel covers the years 2002 to 2006, we can use changes in import tariffs associated with China’s WTO entry as instruments. Our regression results show that firms that expanded their intermediate input imports expan...

This paper analyzes the economic effects of content-based import tariffs China imposed on imported auto parts. While China’s policy penalized any firm that assembled cars with less than 60% Chinese content, the policy was most likely to affect foreign-affiliated firms who were more likely to exceed the content ceiling. To assess whether foreign-aff...

No abstract available.

Heterogeneous firm models of international trade predict that firms sort into production and ex-porting tiers according to their productivities. However, firm-level data maintain the existence of highly productive firms that remain small and abstain from exporting. A second feature of many new trade theory models inconsistent with the data is the o...

Chinese processing trade has grown considerably as firms adopted a wide array of organizational forms to have their products assembled in China for export. To understand the organization of processing trade we modify Grossman and Helpman's (2004) model of managerial incentives to account for the economic costs associated with firms' input control d...

Between 2000 and 2006 Chinese exports grew at an average rate of 25% per year, which positioned China just behind Germany and the US as the third largest exporter, and on a trajectory to become the world’s largest exporter by 2008.1 Nonetheless, while the exceptional growth of Chinese exports has captured international attention, Chinese trade is r...

Each of the world's largest retailers---Walmart, Carrefour, Tesco, and Metro---entered China after 1995. Their subsequent expansion in China may have influenced Chinese exports through two channels. First, they may have enhanced bilateral exports between the retailers' Chinese operations and destination countries also served by stores in the retail...

Recent models of trade with heterogeneous …rms argue that a …rm's productivity has a signi…cant e¤ect on the …rm's exports. This paper examines how a …rm's credit constraints, jointly with its productivity, a¤ect its export decisions. We embed the …rm's credit constraints into a Melitz-type general-equilibrium model by making the probability of the...

This paper studies the relationship between multinational firm proximity and the formation of new export connections by private Chinese exporters between 1997 and 2003. The results indicate that growth in the presence of multinational firms is positively associated with the formation of new trade by local Chinese firms. Further exploration suggests...

International outsourcing involves the import of intermediate inputs or services from unaffiliated foreign suppliers. While it implies that the production of a final product involves production activities in more than one country, this trade in intermediate inputs can be explained by traditional theories of international trade where countries have...

How does international competition affect overseas outsourcing? To address this question, this paper studies production decisions in the U.S.'s overseas assembly program (OAP). In this setting, a number of regularities emerge. First, prior participation is highly correlated with current participation, which suggests that sunk costs influence outsou...

Mihir A. Desai: Assaf Razin and Efram Sadka have synthesized some of their recent work on productivity, taxes, and foreign direct investment (FDI) in this welcome contribution. Their theoretical work emphasizes how setup costs at home and in the host country can drive a wedge between marginal and total profit conditions. This insight combines with...

To examine the role of international competition in outsourcing production decisions, I study the decisions of producers who used the U.S. Overseas Assembly Program (OAP) to conduct assembly operations in developing countries. The evidence, which is based on U.S. OAP imports between 1991 to 2000, shows that production costs and corporate tax polici...

We study Chinese trade between 1997-2003 to see how the presence of multinational firms affected the quality, frequency and survival of new export transactions by private Chinese traders. By exploiting the richness of the data that come from the fine geographical and product detail, we show how own-industry multinational presence helped to stimulat...

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1991. Includes bibliographical references.

This article examines the input choices for producers who assemble their goods abroad and imported them to the United States through the U.S. Overseas Assembly Provisions. Three findings emerge. First, firms reduce their use of foreign parts and assembly when foreign costs rise, but only with a lag. In contrast, recent foreign cost increases boost...

This chapter examines the correlation between previous foreign investment and the signing of bilateral investment treaties (BITs) to explore whether there is any evidence that the signing of BITs is investor-driven. It also looks at how BITs affect the flow of investments between countries when a wide range of controls for the economic environment,...

[eng] We present a two-sided search model where agents differ by their human capital endowment and where workers of different skill are imperfect substitutes. Then the labor market endogenously divides into disjoint segments and wage inequality will depend on the degree of labor market segmentation. The most important results are : 1) overall wage...

This paper studies the decision to participate in outsourcing through the U.S. overseas assembly provision or OAP. When the program is observed at the country–industry level of detail, one notable element is the high degree of persistence in production decisions. To capture this feature, a model of outsourcing decisions in the presence of sunk entr...

This paper studies the cross-country pattern of U.S. overseas assembly activities between 1980 and 2000 to examine how outsourcing decisions are affected by changes in country and competitor costs. A number of interesting regularities emerge. When a country's costs rise, the share of U.S. overseas assembly activities in that location decline. Conve...

How does foreign direct investment affect the trade between nations? While many theories of the multinational firm are based on the premise that foreign production and trade are substitutes, most empirical studies of foreign investment and trade uncover a complementary relationship. This paper shows that the mismatch between theoretical work and em...

How does international competition affect overseas outsourcing? While it is commonly believed that international competition enables firms to desert high cost countries in favor of low wage locations, the frequency of such responses may be reduced if the movement of outsourcing activities involves sunk costs. To put these factors in perspective, I...

The manipulation of transfer prices changes the relative tax burdens multinational firms face in their different countries of operation. Transfer price manipulation also triggers changes in the tariffs that are levied on intra-company imports. For this reason, when tax rates change, as they did for many countries during the 1980s, the incentive to...

This article examines the operations of firms located in U.S. foreign trade subzones to study the responsiveness of outsourcing to international cost changes. I find that firms reduce their reliance on foreign inputs when dollar depreciation increases the relative price of imported inputs. The effect is pervasive across industries and is economical...

This article examines the operations of firms located in U.S. foreign trade subzones to study the responsiveness of outsourcing to international cost changes. I find that firms reduce their reliance on foreign inputs when dollar depreciation increases the relative price of imported inputs. The effect is pervasive across industries and is economical...

We study cost pass-through in the U.S. automobile market using a framework that incorporates the effects of cost changes on input decisions. We find that accounting for firms' factor-market decisions significantly increases measured cost pass-through, although we reject the hypothesis of full cost pass-through and constant markups. In addition, our...

We study Japanese investments between 1980 and 1992 to assess the effectiveness of US state promotion efforts in light of strong agglomeration effects in Japanese investment. The provision of foreign trade zones, lower taxes, and job-creation subsidies have statistically significant effects on the location of investment. Simulations indicate that u...

As a consequence of the rapid growth of temporary agency employment in Germany, the debate on the remuneration of temporary agency workers has intensified recently. The study finds that the earnings gap of temporary help workers in Germany is indeed large and increased during the past decade. Decomposition reveals that the widening gap mainly is dr...

Most studies of taxation and foreign investment limit their investigation to the effects of tax changes on aggregate foreign investment flows. The reason is practical; little evidence is readily available that would allow researchers to consider the effects of taxes on individual firm investment decisions. However, it seems likely that this data li...

This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...

Recent theories of economic geography suggest that firms in the same industry may be drawn to the same locations because proximity generates positive externalities or ‘agglomeration effects’. Under this view, chance events and government inducements can have a lasting influence on the geographical pattern of manufacturing. However, most evidence on...

We study Japanese investments between 1980 and 1992 to assess the effectiveness of state promotion efforts in light of strong agglomeration economies in Japanese investment. Two policy variables are consistently shown to influence the location of investment - foreign trade zones and labor subsidies. We use simulations to explore the impact these po...

This study empirically examines how taxes shape foreign direct investment, and finds that increased taxes spur inward foreign investment. This finding conforms with theories that recognize that foreign investor response is critically shaped by the tax provisions faced by the foreign investor in his home country, and by the effects of tax reform on...

This paper studies how bilateral investment treaties (BITs) affect the trade integration between partner countries. While the overall results from the full sample show that BIT signing is associated with an increase in overall imports that is generally smaller than the effect of WTO membership, BIT signing is found to have a considerable effect on...

This paper studies the extent and variation in import price pass-through for U.S. outsourcing imports. Based on data from 4,676 outsourcing products imported between 1991 and 2000 an average pass-through rate of seventy-five percent is found. The data also show that outsourcing import prices are influenced by the prices chosen by competing import s...

We document three striking facts that pertain to the impact of globalization on wage in-equality in China: (a) the college wage premium in manufacturing stayed flat before China's accession into the WTO in 2001, but rose dramatically thereafter; (b) since the accession, the growth in processing exports of foreign-owned firms has far surpassed the g...