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- W3106991738 abstract "We use Belgian data with information on domestic firm-to-firm sales and foreign trade transactions tostudy how international trade affects firm efficiency and real wages. The data allow us to accuratelyconstruct the domestic production network of the Belgian economy, revealing several new empiricalfacts about firms’ indirect exposure to foreign trade through their domestic suppliers and buyers. Weuse this data to develop and estimate models of domestic production networks and international trade.We first consider a model of trade with an exogenous network structure, which gives analyticalsolutions for the effects of a change in the price of foreign goods on firms’ production costs and realwages. To examine how gains-from-trade calculations change if buyer-supplier links are allowed toform or break in response to changes in the price of foreign goods, we next develop a model of tradewith endogenous network formation. We take both models to the data and compare the empiricalresults to those we obtain using existing approaches. This comparison highlights the relevance ofdata on and modeling of domestic production networks in studies of international trade." @default.
- W3106991738 created "2020-12-07" @default.
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- W3106991738 date "2018-09-01" @default.
- W3106991738 modified "2023-09-26" @default.
- W3106991738 title "Trade and Domestic Production Networks. National Bank of Belgium Working Paper No. 344" @default.
- W3106991738 hasPublicationYear "2018" @default.
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