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Research Papers “Firm Reorganization, Chinese Imports, and US Manufacturing Employment” Link Discussion Papers, U.S. Census Bureau, Center for Economic Studies, CES 17-58, October 2017 Selected Press Coverage: Marginal Revolution (March 1, 2017), The Washington Post (March 31, 2017), The Wall Street Journal (April 2, 2017), Index.hu (January 9, 2018), Index.hu (February 28, 2018)   Abstract What is the impact of Chinese imports on employment of US manufacturing firms? Previous papers have found a negative effect of Chinese imports on employment in US manufacturing establishments, industries, and regions. However, I show theoretically and empirically that the impact of offshoring on firms - which can be thought of as collections of establishments - differ from the impact on individual establishments, because offshoring reduces costs at the firm level. These cost reductions can result in firms expanding their total manufacturing employment in industries in which the US had a comparative advantage relative to China, even as specific establishments within the firm shrink. Using novel data on firms from the US Census Bureau, I show that the data support this view: US firms expanded manufacturing employment as reorganization toward less exposed industries in response to increased Chinese imports in US output and input markets allowed them to reduce the cost of production. More exposed firms expanded employment by 2 percent more per year as they hired more (i) production workers in manufacturing, whom they paid higher wages, and (ii) in services complementary to high-skilled and high-tech manufacturing, such as R&D, design, engineering, and headquarters services. In other words, although Chinese imports may have reduced employment within some establishments, these losses were more than offset by gains in employment within the same firms. Contrary to conventional wisdom, firms exposed to greater Chinese imports created more manufacturing and nonmanufacturing jobs than non-exposed firms. In contrast to many other countries, the U.S. does not have a national curriculum, leaving states, school districts, or even individual schools free to choose the materials covered in their classrooms. This decentralization of curricular decisions may allow schools to choose curricula that are better aligned with the needs of their particular student populations but may misalign instruction with the priorities of the larger community. Decentralization may also harm the achievement of mobile students, who must change curricula when they change schools. This paper analyzes the effect of curriculum standardization on student achievement using quasi-experimental variation from New York City, which granted cutoff-based exemptions from its standardized math and reading curricula. Regression discontinuity estimates indicate that curriculum standardization had no significant effects on student achievement in general or for mobile students. The lack of benefit for mobile students is consistent with the notion that differences in curricula explain little of mobility achievement gap. Close “International Financial Adjustment in a Canonical Open Economy Growth Model” Link with Richard H. Clarida, NBER Working Paper No. 22758, October 2016,   Abstract Gourinchas and Rey (2007) have shown that international financial adjustment (IFA) in the path of expected future returns on a country’s international investment portfolio can complement or even substitute for the traditional adjustment channel via a narrowing of country’s current account imbalance. In their paper, GR derive this result using a log linearization of a net foreign asset accumulation identity without reference to any specific theoretical model of IFA in expected foreign asset returns or the real exchange rate. In this paper we calibrate the importance of IFA in a standard open economy growth model (Schmitt-Grohe and Uribe, 2003) with a well-defined steady level of foreign liabilities. In this model there is a country specific credit spread which varies as a function of the ratio of foreign liabilities to GDP. We find that allowing for an IFA channel results in a very rapid converge of the current account to its steady state (relative to the no IFA case) so that most of the time that the country is adjusting, all the adjustment is via the IFA channel of forecastable changes in the costs of servicing debt and in the appreciation real exchange rate. By contrast, in the no IFA case, current account adjustment by construction does all the work and current account adjustment is much slower. "Does Financial Liberalization Promote Imports?"  September 2016, submitted, Link              (Winner of Harriss Prize 2013, Olga Radzyner Award 2014) Abstract This paper proposes a new channel through which financial shocks affect firms - imported intermediate inputs - and investigates its empirical implications for firms' production decision in a panel of Hungarian firms and banks. In a model of liquidity-constrained heterogeneous firms, only the most productive firms import the higher productivity foreign intermediates because these firms are the only ones that can afford the necessary financing. In this model, a financial liberalization results in lower interest rates on bank loans that reduces the relative cost of imported intermediates, induces firms to become importers and leads continuing importers to import more. Thus capital market liberalization acts like trade liberalization. Using the last stage of Hungarian financial account liberalization in 2001 as a natural experiment, I find that, as predicted by the theory, firms whose banks were given access to new international sources of credit increased their intermediate import shares of production. Moreover, this increase was financed by the short-term liquidity arising from the liberalization. These findings support the hypothesis that positive credit supply shocks reduce the relative cost of imported intermediates, and induce firms to import and increase the share of imports in their intermediate input use. Work in Progress “Measuring Retailers’ Productivity” with Stephen J. Redding and David E. Weinstein “The Role of Market Structure and the Firm’s Boundary in the Propagation of Industry Specific Shocks: The Case of the China Shock in the US” “The Geography of US Firms’ Organization” “Financial Shocks, Capital Accumulation and Skill Biased Technical Change across Space” with Dávid Krisztián Nagy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ildikó Magyari
ildiko.magyari@columbia.edu

 

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