This thesis investigates three questions in international trade. Chapter 1 develops a multi-product firm model of international trade with the endogenous decisions on export and import to study technology diffusion via goods trade. This chapter shows, both theoretically and empirically, that a firm will import a product in the category where it already has higher expertise, which is consistent with the theoretical prediction. This chapter finds that a firm's productivity in a category improves when it imports in the same category, but only product expertise is accumulated, not the firm's ability.
Chapter 2 examines the export market reallocation and the dynamics of export prices to the Czech Republic, Poland, Slovakia Republic, and Slovenia induced by their import tariff reduction in 2004. The empirical results show that import tariff reduction in these countries induces market reallocation towards the high-income countries and highly-priced products, suggesting the transition from low quality to high quality products. Moreover, this chapter finds that the transition pattern is heterogeneous across countries: in some countries, the market share was reallocated towards the middle-high income countries at the costs of the richest countries. Import tariff reduction significantly raised the price of exports to some countries. For example, export prices to Slovakia will rise by 46.5 percent if Slovakia completely removes its import tariff. The market organization is crucial for the effects of tariff reduction on prices.
Chapter 3 studies whether state visits paid by Chinese political leaders promote trade between China and the host countries by analyzing China's trade flows with 184 countries between 1998 and 2014. This chapter uses a valid instrument to address endogeneity problem of state visits.The empirical results show that state visits don't increase trade between China and the host country immediately after the visits are made. The trade promotion effects come two years after the visits. Moreover, this chapter finds that the promotion effects are biased towards the industries and firms that have close political connections with the government, and that trade barriers such as quotas and licences offset the promotion effects of state visits.