Essays on International Trade and Energy Economics
Date
2020-07-16
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Abstract
This dissertation includes three essays examining topics related to international trade and energy economics. I use state-of-the-art empirical methodologies to investigate the effects of trade and energy policies on firm performance and investments in new technologies. Chapter 1 utilizes modern productivity-estimation techniques to investigate the channels through which globalization affects productivity. While there exists compelling evidence that trade increases aggregate productivity through reallocation of resources towards more productive firms, less is known about the effect of trade on firm-level productivity and the channels generating it. I fill this gap by taking an in-depth examination of the channels affecting firm-level productivity in response to rising import competition from China. I take advantage of a rich panel of firms in India to estimate productivity for all firms' products. Matching Indian-firm data to the product-level trade data, I then estimate the causal effect of the surge in imports from China on (i) the productivity of firm's products, and (ii) the reallocation across products. I find that greater Chinese import competition increases the productivity of existing products. However, I find no reallocation across products in response to the surge in imports from China. Back-of-the-envelope calculations suggest productivity gains related to Chinese import competition account for 20-30 percent of aggregate productivity growth in India. These productivity gains have important policy implications because moving from low- to middle-income requires rising productivity, and my results suggest that greater import competition accelerates that process. These gains can eventually lift millions out of poverty. Chapter 2, which is based on joint work with Alexander Whalley and Greg C. Wright, examines the effects of intellectual property right policies in international markets. We study the cross-border spillovers of national intellectual policy decisions on high-tech firms and domestic consumers. Specifically, we examine how export/domestic sales, prices, and markups of high technology firms in Taiwan are affected by a policy-driven demand shock in the United States from US patent policy. We document three results. First, the loss of access to the US market due to patent infringement decreases export sales and export quantities. Second, the loss of access to the US market increases domestic sales and domestic quantities. Third, domestic prices and domestic markups decrease, but marginal costs, export prices, and export markups remain relatively stable. Our results provide evidence on the transmission of export shocks to the domestic economy which are consistent with the new trade models combining non-constant marginal costs with the product differentiation and economies of scale. Chapter 3, which is based on joint work with Blake Shaffer, looks at the role market rules, or changes in these rules, have on deployment of energy storage in electricity systems. This chapter provides a key contribution in this area of growing importance, as it is the first to provide well-identified empirical estimates of the responsiveness of storage investment to changes in market rules. A recent policy change in the United States required system operators to compensate providers of frequency regulation services based on speed and accuracy. This seemingly subtle change had a beneficial effect for fast-acting storage resources. Using a difference-in-differences method, exploiting the fact that the order covers a subset of U.S. electricity regions, we find a greater than 30 percent increase in the likelihood of investment on new projects used for frequency response in the covered regions. While technological barriers are often described as the reason for limited deployment of storage to-date, our results suggest that policy reforms to properly compensate storage resources for the services they perform can have a material effect on deployment.
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Keywords
International Trade, Productivity, Energy Storage
Citation
Tabari, M. (2020). Essays on International Trade and Energy Economics (Doctoral thesis, University of Calgary, Calgary, Canada). Retrieved from https://prism.ucalgary.ca.