A tale of two tails: Productivity distribution and the gains from trade

Nigai, Sergey

doi:10.1016/j.jinteco.2016.10.006

Cited by 42 publications

(27 citation statements)

References 44 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The rankings are statistically significant typically at well beyond a 1 percent level. Our results are consistent with the evidence provided by Combes et al (2012) and Nigai (2017) using French data. The data strongly suggest that Pareto provides a poor fit, and that lognormal is a reasonable distribution for TFP.…”

Section: Manufacturing Tfpsupporting

confidence: 94%

“…Sager and Timoshenko (2017) show that a convolution of lognormal and Pareto fits best using Brazilian export sales data. Nigai (2017) shows that a mixture of lognormal and Pareto fits the firm productivity distribution of French firms the best and that its adoption affects the estimation of the gains from trade. Armenter and Koren (2015) finds that the Pareto shape parameter required to match the exporter size premium (how much larger the average exporter is) would be about 1.65, and thus it is difficult to reconcile models of selection into exporting by firm size with a size distribution generated by realistic Pareto parameterizations.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

On the U.S. Firm and Establishment Size Distributions

Kondo

Lewis

Stella

2018

FEDS

View full text Add to dashboard Cite

This paper revisits the empirical evidence on the nature of firm and establishment size distributions in the United States using the Longitudinal Business Database (LBD), a confidential Census Bureau panel of all non-farm private firms and establishments with at least one employee. We establish five stylized facts that are relevant for the extent of granularity and the nature of growth in the U.S. economy: (1) with an estimated shape parameter significantly below 1, the best-fitting Pareto distribution substantially differs from Zipf's law for both firms and establishments; (2) a lognormal distribution fits both establishment and firm size distributions better than the commonly-used Pareto distribution, even far in the upper tail; (3) a convolution of lognormal and Pareto distributions fits both size distributions better than lognormal alone while also providing a better fit for the employment share distribution; (4) the estimated parameters are different across manufacturing and services sectors, but the distribution fit ranking remains unchanged in the sectoral subsamples. Finally, using the Census of Manufactures (CM), we find that (5) the distribution of establishment-level total factor productivity-a common theoretical primitive for size-is also better described by lognormal than Pareto. We show that correctly characterizing the firm size distribution has first order implications for the effect of firm-level idiosyncratic shocks on aggregate activity.

show abstract

Section: Manufacturing Tfpsupporting

confidence: 94%

Section: Introductionmentioning

confidence: 99%

On the U.S. Firm and Establishment Size Distributions

Kondo

Lewis

Stella

2018

FEDS

View full text Add to dashboard Cite

show abstract

“…Upon making certain parametric assumptions about the functional form of the wage distribution, the Gini coefficient and the average wage are sufficient statistics to impute wages for all percentiles of the distribution per country and year. In particular, this is possible when assuming that wages follow either (i) a log-normal, (ii) a Pareto, (iii) or a mixture of the two distributions, where the upper tail is Pareto and the rest is log-normally distributed (see Nigai 2017). We provide details on this mixture and describe the imputation and calibration procedures for wage percentiles in the Appendix.…”

Section: Globalization and Relative Labor Income Tax Burdens Acrosmentioning

confidence: 99%

The Taxing Deed of Globalization

Egger

Nigai

Strecker

2019

American Economic Review

Self Cite

View full text Add to dashboard Cite

show abstract

“…11 Calibrated to the U.S. data, Melitz and Redding (2015) set the Pareto shape parameter for firm productivity to be 4.25, and Bernard, Redding and Schott (2009) set it equal to 4. Estimating using French firm level data, Nigai (2017) found that a Pareto shape parameter would take a value of 1.9. Lower values of k correspond to greater firm heterogeneity.…”

Section: The Seller's Problemmentioning

confidence: 99%

Trade Flows and Exchange Rates: Importers, Exporters and Products

Devereux

Dong

Tomlin

2019

View full text Add to dashboard Cite

Using highly disaggregated transaction-level trade data, we document the importance of new firmlevel trade partner relationships and the addition of new products to existing relationships in driving long-run import flows. Moreover, we find that these margins are sensitive to movements in the exchange rate. We rationalize these findings in a model of international trade with endogenous matching between heterogenous importers and exporters. Simulations of the model highlight a new channel through which exchange rate movements can affect trade-through the short-run formation of new trade relationships and the range of products traded within relationships-which can impact long-run flows. Bank topics: International topics; Exchange rates; Firm dynamics JEL codes: F1, F4 Résumé À partir de données fortement désagrégées relatives aux transactions commerciales, nous rendons compte de l'importance de l'établissement de nouvelles relations entre les partenaires commerciaux à l'échelle des entreprises et de l'ajout de produits dans le cadre des relations existantes comme moteurs des flux d'importation à long terme. De plus, nous constatons que ces marges sont sensibles aux mouvements du taux de change. Nous expliquons ces résultats à l'aide d'un modèle de commerce international avec appariement endogène entre importateurs et exportateurs hétérogènes. Les simulations du modèle font ressortir un nouveau canal par lequel les mouvements du taux de change peuvent avoir une incidence sur les échanges-par l'établissement de nouvelles relations commerciales de court terme et l'éventail de produits échangés-et influer ainsi sur les flux de long terme. Sujets : Questions internationales; Taux de change; Dynamique des entreprises Codes JEL : F1, F4 iii Non-technical Summary Motivation and question At the most fundamental level, international trade takes places between an exporting firm and an importing firm for a given product. Focusing on the importer-exporter-product triplet allows us to rethink the traditional intensive and extensive margin dichotomy of international trade, the role of these margins in determining trade flows and the role of aggregate shocks in shaping these flows. We explore the role of relationship formation and evolution-in terms of the products traded within relationships-in import flows, and then we examine how exchange rate shocks affect trade flows by influencing these margins. It is possible that even transitory exchange rate shocks can have persistent trade effects because a positive shock that allows firms to overcome relationship establishment fixed costs, as well as product fixed costs, may not be undone once the shock dissipates. Methodology Using highly disaggregated data on Canadian imports, where the domestic importer, foreign exporter and product are known, we document several facts pertaining to market concentration and buyer-seller-product relationships. We then develop a model of international trade with endogenous matching between heterogeneous importers and exporters, where the exporters produ...

show abstract

A tale of two tails: Productivity distribution and the gains from trade

Cited by 42 publications

References 44 publications

On the U.S. Firm and Establishment Size Distributions

On the U.S. Firm and Establishment Size Distributions

The Taxing Deed of Globalization

Trade Flows and Exchange Rates: Importers, Exporters and Products

Contact Info

Product

Resources

About