Labor Market Monopsony and Firm Behavior: Evidence from Spanish Exporters

In this paper, I develop a method to estimate the effect of firm behavior on labor market monopsony power. Using China’s accession to WTO for the identification, I employ the proposed empirical framework to analyse the impact of Spanish firms’ exports on their labor market monopsony power. The findings suggest that higher exports raised monopsony power of firms in labor markets between 1996 and 2007. After 2001, more intensely exporting firms reduced their wages by 36-45 percentage points and paid their employees around 39-49 percent of their marginal revenue product. Aligned with increased monopsony power, exporting firms experienced a decline labor productivity and labor share while they employed more low-skilled workers and temporary contracts

Emissions and Allowances in the EU Emissions Trading System after the Paris Agreement

In this paper, I examine how allowances allocation affected emissions of power sector installations in the EU ETS following the Paris Agreements. The dataset I use covers the 2010-2022 period, includes the emissions and allowances of 4,498 installations operating in power sector across the 27 Member States of the European Union. I discover that installations receiving lower allowances in the first quartile (Q1) reduced their emissions by 3.5% from 2016 to 2022 compared to the 2010-2015 period. I find no evidence on the installations in second, third and fourth quartiles due to the country specific developments. I also show that country characteristics have a crucial role in policy effectiveness because the emissions of installations located in lower-income Member States entered into the EU at later stages did not fall

Export Destination and Firm Upgrading: Evidence from Spain

This paper examines the role of export destinations on firm upgrading. I exploit the real effective exchange rate devaluation in Spain during the Great Recession to identify the unusual export performance of manufacturing firms. Using directly observable measures of firm upgrading, I find that increased share of exports to low-income destinations in sales reduced productivity and upgrading efforts of firms. However, real effective exchange rate devaluation did not affect the share of exports to high-income destinations in sales as well as productivity and upgrading efforts. The results are consistent with the quality sorting hypothesis that suggests a positive relationship between firm productivity and product quality. The findings in this paper emphasize that export market destination is an important determinant in analysing the gains from exporti

Emissions and Allowances in the EU Emissions Trading System after the Paris Agreement

In this paper, I examine how allowances allocation affected emissions of power sector installations in the EU ETS following the Paris Agreements. The dataset I use covers the 2010-2022 period, includes the emissions and allowances of 4,498 installations operating in power sector across the 27 Member States of the European Union. I discover that installations receiving lower allowances in the first quartile (Q1) reduced their emissions by 3.5% from 2016 to 2022 compared to the 2010-2015 period. I find no evidence on the installations in second, third and fourth quartiles due to the country specific developments. I also show that country characteristics have a crucial role in policy effectiveness because the emissions of installations located in lower-income Member States entered into the EU at later stages did not fall

The Impact of Robot Adoption on Global Sourcing

This paper studies the impact of robot adoption on firms’ global sourcing activities. Using a rich panel dataset of Spanish manufacturing firms, we show that robot adopting firms increased their intermediate input purchases from foreign and domestic suppliers between 2006 and 2016. The effects of robots differ across sourcing strategies: the highest in foreign outsourcing and the lowest in foreign vertical integration. We find that robot adopters fragment their production further by reducing the concentration of purchases from suppliers and the increase in intermediate input purchases is related to quality upgrading to a certain extent. Marginal treatment effects estimates suggest that responses to adoption are heterogeneous: higher probability of adoption intensifies the effects on outsourcing and weakens the effects on vertical integration. In contrast to rising concerns over reshoring, our findings suggest that robots have yet promoted trade in intermediate inputs

Essays on Firm Behavior in International Trade

Programa de Doctorat en Economia[eng] International trade experienced an unprecedented growth and the world economy has been more integrated than ever before in the last decades. During this period, access to international trade helped firms to produce their products more efficiently, conduct innovative activities, create more jobs, invest and increase human capital, become more environmentally friendly and increase the quality of their products. As the actual actors of cross-border transactions, firms determined trade flows and shaped the international trade architecture. They formed trade networks and Global Value Chains (GVCs) by organizing their production across distinct locations with the support of technological improvements. Therefore, examining the firm behavior is vital for trade studies to understand the dynamics in product and labor markets as well as consumer behavior more easily. This thesis aims to provide evidences on the implications of firm behavior in international trade and the effects of firms’ trade activities on their performance and labor market outcomes. In this regard, I examine the causes and consequences of firm behavior in trade activities and how firms’ decisions shape international trade flows. Chapter 2 examines the impact of robot adoption on global sourcing strategies of firms. With my thesis advisors as co-authors, we develop a theoretical model and empirically show that foreign sourcing activities of robot adopters increased between 2006 and 2016 but robot adoption did not affect firms’ domestic sourcing activities. The findings in this analysis indicate that robots promote trade in intermediate inputs. Chapter 3 highlights the importance of export market destination in explaining productivity gains from exporting. I discover that rising share of exports to low-income destinations in sales driven by real effective exchange rate devaluation reduced productivity and upgrading efforts of firms. In contrast, the share of exports to high-income destinations in sales did not change during the Great Recession and therefore had no impact on productivity and upgrading efforts. In Chapter 4, I develop a method that allows to estimate the effect of firm behavior on labor market monopsony power. Using this framework, I show that larger exports of Spanish manufacturing firms raised their labor market monopsony power from 1996 to 2007. This evidence shows that more intensely exporting can increase firms’ monopsony power in labor markets

Essays on Firm Behavior in International Trade

[eng] International trade experienced an unprecedented growth and the world economy has been more integrated than ever before in the last decades. During this period, access to international trade helped firms to produce their products more efficiently, conduct innovative activities, create more jobs, invest and increase human capital, become more environmentally friendly and increase the quality of their products. As the actual actors of cross-border transactions, firms determined trade flows and shaped the international trade architecture. They formed trade networks and Global Value Chains (GVCs) by organizing their production across distinct locations with the support of technological improvements. Therefore, examining the firm behavior is vital for trade studies to understand the dynamics in product and labor markets as well as consumer behavior more easily. This thesis aims to provide evidences on the implications of firm behavior in international trade and the effects of firms’ trade activities on their performance and labor market outcomes. In this regard, I examine the causes and consequences of firm behavior in trade activities and how firms’ decisions shape international trade flows. Chapter 2 examines the impact of robot adoption on global sourcing strategies of firms. With my thesis advisors as co-authors, we develop a theoretical model and empirically show that foreign sourcing activities of robot adopters increased between 2006 and 2016 but robot adoption did not affect firms’ domestic sourcing activities. The findings in this analysis indicate that robots promote trade in intermediate inputs. Chapter 3 highlights the importance of export market destination in explaining productivity gains from exporting. I discover that rising share of exports to low-income destinations in sales driven by real effective exchange rate devaluation reduced productivity and upgrading efforts of firms. In contrast, the share of exports to high-income destinations in sales did not change during the Great Recession and therefore had no impact on productivity and upgrading efforts. In Chapter 4, I develop a method that allows to estimate the effect of firm behavior on labor market monopsony power. Using this framework, I show that larger exports of Spanish manufacturing firms raised their labor market monopsony power from 1996 to 2007. This evidence shows that more intensely exporting can increase firms’ monopsony power in labor markets