4 avril 2022
http://creativecommons.org/licenses/by-nc-nd/ , info:eu-repo/semantics/OpenAccess
Michele Fioretti et al., « Two-Sided Market Power in Firm-to-Firm Trade », Archive ouverte de Sciences Po (SPIRE), ID : 10670/1.vnr5d2
Global value chains (GVCs) typically involve large firms exerting bargaining power over the terms of trade. We develop a novel theory of international prices accounting for these features of GVCs and illustrate their e↵ect on the pass-through of trade shocks into import prices. We build a new dataset merging transaction-level U.S. import data with balance sheet data for both importers and exporters to evaluate the model's performance. Our estimated model generates more accurate predictions of pair-level price changes following trade shocks than standard models, improving the estimated impact of the 2018 trade war on aggregate U.S. import prices by 40-60%.