Essays on International Trade

The goal of my PhD Thesis is to understand the drivers and consequences of globalization and technological change, the interplay between them, and the key role played by multinational enterprises (MNEs). This project is divided into three chapters. In the first chapter, I study how MNEs foster the adoption of automation technology from the supply side. I focus on the global market of industrial robots, a leading type of automation technology, where a few MNEs dominate sales. I first collect new data on their characteristics and global sales networks. I then develop and estimate a multi-country general equilibrium model featuring oligopolistic multinational robot sellers. Using this model, I find that MNEs' market entry and pricing responses transmit internationally and amplify the aggregate and distributional effects of commonly debated policies targeting robots. In the second chapter, using a panel of Spanish manufacturing firms covering the 1990-2017 period, I take a demand-side perspective and show that firms acquired by MNEs are more likely to use industrial robots as production inputs, which allow affiliates to scale up production and expand into foreign markets but reallocate income away from labor. These findings shed new light on how globalization and technological change jointly contribute to the decline in the labor share. In the third chapter, in collaboration with Paola Conconi (ECARES), Glenn Magerman (ECARES), and Catherine Thomas (London School of Economics), we provide a novel explanation for the dominant role of MNEs in international trade: after being acquired by an MNE, firms face lower trade frictions in and around the network of countries in which their parent has a presence. We provide a model of firms' export and import choices that isolates this effect from other channels through which multinational ownership can affect trade participation. We bring the model to the data by combining rich information on the universe of Belgian firms and on MNEs' global networks. We find that acquired firms are more likely to start trading with countries that belong to---or that are exogenously added to---their parental network. Network effects extend beyond the firm boundaries and dominate traditional firm-level channels in explaining affiliates’ entry in new markets. Our analysis suggests that the growth rate of acquired firms is more than twice as large as that of the median domestic firm due to multinational network effects.