Showing papers by "Robert C. Feenstra published in 2020"
TL;DR: This article analyzed the effects of China's rapid export expansion following its WTO entry on the U.S. prices of manufacturing goods between 2000 and 2006, exploiting cross-industry variation in trade liberalization and found that the largest contribution to the overall price reduction comes from lower inputs tariffs in China, with further price reductions caused by the reduction in tariff uncertainty.
44 citations
TL;DR: In this paper, the authors examined the price and variety of a sample of consumer goods at the barcode level in cities within China and found that the prices of goods tend to be lower in larger cities.
Abstract: Author(s): Feenstra, RC; Xu, M; Antoniades, A | Abstract: We examine the price and variety of a sample of consumer goods at the barcode level in cities within China. Unlike the position in the United States, in China the prices of goods tend to be lower in larger cities. We explain that difference between the countries by the more uneven spatial distribution of manufacturers' sales and retailers in China, and we confirm the pro-competitive effect of city size on reducing markups there. In both countries, there is a greater variety of goods in larger cities, but that effect is more pronounced in China. Combining the lower prices and greater variety, the price indexes in China for the goods we study fall with city size by around seven times more than in the United States.
7 citations
TL;DR: In this article, the authors study the ability of firms of various sizes to cater to the taste of consumers who differ in their geographic location, store choice, and type or purchase history.
Abstract: We study the ability of firms of various sizes to cater to the taste of consumers who differ in their geographic location, store choice, and type or purchase history. Using data on purchases at the household-barcode level from Nielsen, we find that heterogeneity across consumer segments accounts for 39% of the variation in product appeal, which is a key determinant of firm size. Using a model with heterogeneous consumers, we find that consumer heterogeneity increases markups and profits, and such a positive effect is more pronounced for large firms. Furthermore, we find a link between firm size heterogeneity and the strategies firms follow in the presence of heterogeneous consumer segments. While smaller firms cater to the taste of few segments, typically the largest ones, larger firms exploit their wider scope to target a larger number of segments, both large and niche. Our quantitative model rationalizes the difference in strategies with the presence of segment-specific market costs.
5 citations
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TL;DR: In this paper, the authors show that the most efficient way for China to increase its imports from the United States is to mimic the effect of an import subsidy, and they find that this trade diversion is especially strong for Australia and Canada, followed by Brazil, Indonesia, Malaysia, Thailand, and Vietnam.
Abstract: In December 2019, the United States and China reached a Phase One trade agreement, under which China committed to purchase more imports from the United States: $12.5 billion more agricultural imports in 2020 and $19.5 billion more in 2021, as compared to 2017. We show that the most efficient way for China to increase its imports from the United States is to mimic the effect of an import subsidy. If China’s agricultural imports did not otherwise grow from their 2017 values, then the subsidies would need to be 42% and 59% to meet the 2020 and 2021 targets, respectively. These effective subsidies mean that China would divert agricultural imports away from other countries. We find that this trade diversion is especially strong for Australia and Canada, followed by Brazil, Indonesia, Malaysia, Thailand, and Vietnam.
4 citations