The Impact of Trade Liberalization on Productivity Within and Across Industries: Theory and Evidence

Numerous studies have investigated the link between trade policy and firm productivity. Despite justifying firm level analysis on the basis of considerable heterogeneity between firms within narrowly defined industries, these studies typically constrain all firms to have the same expected response to changes in trade policy. In this paper we develop a theoretical model that accounts for the existence of firm level heterogeneity within industries and predicts that the equilibrium response to changes in trade policy will also be heterogeneous in terms of both sign and size. The variation in firm level reaction is shown to be determined by both firm and industry characteristics and therefore the equilibrium response to trade policy is predicted to vary not only within industries but also across industries. These results allow us to use both sources of variation in the data. We examine these predictions on a firm level data set for the Colombian manufacturing sector in the 1980’s and find strong support for them.tariffs, technology diffusion, productivity.

Where the Girls Are: Trade and Labor Market Segregation in Colombia

Gary Becker's theory of discrimination argues that increasing competition will reduce discrimination in the labor market. We use the Colombian trade liberalization episode over the period 1984–91 to investigate this claim on plant-level data in three ways. First, we examine whether women are concentrated in exporting plants. Second, we examine whether the increase in foreign competition due to unilateral trade liberalization disproportionately drove discriminating plants out of the market. Finally, we investigate whether trade liberalization affected hiring decisions (and thus gender segregation) by Colombian firms.discrimination, trade, competition

Trade Liberalization and Pollution Havens

U.S. Presidential Executive Order 13141 commits the United States to a "careful assessment and consideration of the environmental impacts of trade agreements." The most direct mechanism through which trade liberalization would affect environmental quality in the U.S. is through changes in the composition of industries. Freer trade means greater specialization, increasing the concentration of polluting industries in some countries and decreasing it in others. Indeed, in this paper we predict a substantial reduction in U.S. pollution from 1972-94 due entirely to a shift in the composition of U.S. manufacturing toward cleaner industries. We then use annual industry-level data on imports to the U.S. to examine whether this compositional shift can be traced to the significant trade liberalization that occurred over the same time period; we conclude that no such connection exists. First, we find that a shift toward cleaner industries, similar to that observed in U.S. manufacturing, has also occurred among U.S. imports. Second, we find no evidence that pollution-intensive industries have been disproportionately affected by the tariff changes over that time period.

Taxes, Default Risk, and Yield Spreads

This paper represents an extension and integration of recent empirical and theoretical research on default risk and taxability. The purpose of the paper is to develop and test a model of interest rate spreads which incorporates both the effect of taxes and differences in default probabilities in a theoretically correct manner. There is an important fundamental difference between our approach to explaining yield spreads and the approach most commonly taken in literature. Unlike nearly all of the previous work, we do not begin with a yield spread model, i.e.,one which begins by examining differences in yields, but rather begin with an expected return or pricing model, which can then be expressed in the yield spread format. This is a fundamental difference in approaches which we feel leads to a superior theoretical formulation which can then be tested empirically without many of the problems inherent in the alter-native approach. The theoretical model is a simple extension of earlierwork on default by Bierman and Hass (1975) and Yawitz (1977), altered appropriately to take explicit account of tax effects. While there is a considerable literature that analyzes the effect of taxability on rate spreads, we are unaware of any previous study that considers tax consequences in the event of default, a rather surprising omission.

Is Environmental Policy a Secondary Trade Barrier? An Empirical Analysis

Should international trade agreements be extended to include negotiations over environmental policy? The answer depends on whether countries distort levels of environmental regulations as a secondary means of providing protection to domestic industries; our results suggest that they do. Previous studies of this relationship have treated the level of environmental regulation as exogenous, and found a negligible correlation between environmental regulation and trade flows. In contrast, we find that, when the level of environmental regulation is modeled as an endogenous variable, its estimated effect on trade flows is significantly higher than previously reported.

Comparison of Pressurized and Gravity Distribution Systems for Wastewater Treatment

Pressurized distribution of domestic wastewater over a sand filter surface achieves better treatment than gravity distribution. The pressurized distribution system caused the filter to better remove organics (BOD₅) and suspended solids. Pressurized distribution also caused the sand filter to achieve more complete nitrification than the filter having gravity distribution. Two slow sand filters 15.2 cm wide, 3.1 m long and 15.2 cm deep were built and loaded with domestic septic tank effluent for 250 days at a rate of 5.1 cm per day. Influent and effluent samples were collected and analyzed for five-day Biochemical Oxygen Demand (BOD₅), suspended solids, ammonia- nitrogen, and nitrate-nitrogen. One filter received septic tank effluent through a 10 cm nominal diameter PVC perforated pipe viaa distribution box dosed by a pump with gravity flow from the distribution box to the pipe. The other filter received water through a 2.5 cm nominal diameter PVC pipe having 0.4 cm diameter holes drilled 76.2 cm on center. The gravity distribution filter system achieved mean effluent values of 36.4 mg// BOD₅ , 19.8 mg// suspended solids, 37.6 mg// ammonia-nitrogen, and 46.6 mg// nitrate-nitrogen. The pressurized distribution system achieved 19.1 mg// BOD₅\u3e 12.2 mg// suspended solids, 25.3 mg// ammonia-nitrogen, and 64.03 mg// nitrate-nitrogen. Influent to the filters averaged 132.1 mg// , 90.3 mg//, 70.3 mg// , and 3.6 mg// BOD₅ , suspended solids, ammonia-nitrogen, and nitrate- nitrogen, respectively

Trophic Transfer of Fatty Acids, Sterols, and a Triterpenoid Alcohol Between Bacteria, a Ciliate, and the Copepod Acartia Tonsa

The incorporation of lipids into the copepod Acartia tonsa and its eggs was measured when it was fed either a bacterivorous ciliate (Pleuronema sp.) or a diatom (Thalassiosira weissflogii). Egg production was 10-fold higher on the diatom diet, whereas hatch success of eggs was the same for algal and ciliate diets. Adult copepods fed diatoms contained more total fatty acid and sterols than copepods fed the ciliate diet, and individual lipids reflected the dietary source. Eggs from diatom-fed copepods had fewer fatty acids but more sterols than eggs from copepods on a ciliate diet. Ciliate-fed copepods and their eggs contained significant amounts of odd chain-length and branched fatty acids diagnostic of bacteria. These fatty acids, in particular the iso C15 and C17, were also elevated in ciliates feeding on bacteria in culture, suggesting the direct transfer of bacterial fatty acids from ciliates to copepods and their eggs. We also observed the assimilation of tetrahymanol, a triterpenoid alcohol specific to ciliates, into adults and eggs when copepods were fed a ciliate diet. Tetrahymanol accounted for 6.6±1.9% of total neutral lipids in adults and 35.4 ± 6.5% in eggs. These results suggest that bacterivorous ciliates may not provide copepods with adequate nutritional requirements for long-term survival, but that lipids unique to bacteria and ciliates can be assimilated by and may provide useful tracers of consumption by copepods