Mary Amiti

Service Offshoring and Productivity: Evidence from the US

The practice of sourcing service inputs from overseas suppliers has been growing in response to new technologies that have made it possible to trade in some business and computing services that were previously considered non-tradable. This paper estimates the effects of offshoring on productivity in US manufacturing industries between 1992 and 2000. It finds that service offshoring has a significant positive effect on productivity in the United States, accounting for around 10 per cent of labour productivity growth during this period. Offshoring material inputs also have a positive effect on productivity, but the magnitude is smaller accounting for approximately 5 per cent of productivity growth.

Service Offshoring, Productivity, and Employment: Evidence from the United States

On a conventional pipe wrench, an L-shaped lever arm has the short bisected arm segment cooperatively disposed over and secured by a fixed pivot to a linear extention of the threaded section of the adjustable pipe jaw. A free pivot disposed at the terminus of the bisected arm secures a roller between and in the short bisected arm segment. The L-shaped lever arm and pivoted roller are adaptively sized and shaped to provide a lock means for the pipe jaw when the lever handle is pressed down against the pipe wrench handle, locking the roller against the wrench handle by compressing the roller in detent against the wrench handle.

Trade liberalization, intermediate imputs and productivity

This paper estimates the effects of trade liberalization on plant productivity. The main contribution of the paper is to distinguish between productivity gains that arise from tougher import competition, due to lower output tariffs, relative to those arising from access to cheaper intermediate inputs. We use Indonesian manufacturing census data, which provides plant level information on imports. So in contrast to other studies we are able to control for the firms that are actually importing inputs rather than assuming they are all import competing. We also have detailed information on which inputs firms use so that we can match them with the appropriate tariffs. The results show that benefits arising from lower tariffs on intermediate inputs are significantly higher than those arising from reducing output tariffs, with importing firms enjoying the largest gains. A 10 percentage point fall in tariffs increases productivity by 1 percent due to lower output tariffs, whereas importing firms enjoy a 10 percent gain due to lower input tariffs.

How Much Do Bank Shocks Affect Investment? Evidence from Matched Bank-Firm Loan Data

We show that supply-side financial shocks have a large impact on firms’ investment. We do this by developing a new methodology to separate firm credit shocks from loan supply shocks using a vast sample of matched bank-firm lending data. We decompose loan movements in Japan for the period 1990 to 2010 into bank, firm, industry, and common shocks. The high degree of financial institution concentration means that individual banks are large relative to the size of the economy, which creates a role for granular shocks as in Gabaix (2011). As a result, idiosyncratic bank shocks i.e., movements in bank loan supply net of borrower characteristics and general credit conditions can have large impacts on aggregate loan supply and investment. We show that these idiosyncratic bank shocks explain 40 percent of aggregate loan and investment fluctuations.

Regional Specialization and Technological Leapfrogging

This paper investigates circumstances where a region loses its technological leadership after some major technological breakthrough. Input-output linkages between firms in a Cournot upstream industry and a perfectly competitive downstream industry create forces for agglomeration in particular locations, driving up prices of immobile factors. A new superior technology, incompatible with the old, will not benefit from these linkages, so is more likely to be established in locations with little existing industry due to lower factor prices. Furthermore, it is possible that the old and new technologies can coexist.

How Much Do Idiosyncratic Bank Shocks Affect Investment? Evidence from Matched Bank-Firm Loan Data

We show that supply-side financial shocks have a large impact on firms’ investment. We develop a new methodology to separate firm borrowing shocks from bank supply shocks using a vast sample of matched bank-firm lending data. We decompose aggregate loan movements in Japan for the period 1990–2010 into bank, firm, industry, and common shocks. The high degree of financial institution concentration means that individual banks are large relative to the size of the economy, which creates a role for granular shocks as in Gabaix’s (2011) study. We show that idiosyncratic granular bank supply shocks explain 30–40 percent of aggregate loan and investment fluctuations.

Investment Liberalisation and International Trade

This paper estimates the cross-price elasticity of exports with respect to investment costs for bilateral relations between the US and 35 partner countries. We show that the relationship depends on country characteristics as predicted by the Markusen et al. (1996) model. When countries differ in relative factor endowments and trade costs are low, investment liberalisation stimulates exports, whereas when countries are similar in terms of relative factor endowments and size, and trade costs are moderate to high, investment liberalisation reduces exports.

Economic Geography and Wages: The Case of Indonesia

This paper estimates the agglomeration benefits that arise from vertical linkages between firms. The analysis is based on international trade and economic geography theory developed by Krugman and Venables (1995). We identify the agglomeration benefits off the spatial variation in firm-level nominal wages. Unusually detailed intermediate input data allow us to capture spatial input/output linkages more accurately than in previous studies. We take account of the location of input suppliers to estimate cost linkages, and the location of demand from final consumers and other firms to estimate demand linkages. The results show that the externalities that arise from demand and cost linkages are quantitatively important and highly localized. An understanding of the extent and strength of spatial linkages is crucial in shaping policies that seek to influence regional development.

Are Uniform Tariffs Optimal

Trade Theory, Analytical Models and Development, comprises 11 essays offering new contributions on the following topics: trade and wages; factor endowments, factor mobility and political economy of trade; optimality of tariffs; measurement of welfare; customs union theory; endogenous mergers and tariffs; intra-industry trade; state trading enterprises and trade liberalisation; general equilibrium effects of e-Commerce, and trade; economic growth with production and consumption externalities; and environmental pollution and resource degradation.

Will Labour Intensive Industries Always Locate in Low Wage Countries

This paper analyses how trade liberalisation affects location decisions of firms that are vertically linked and which differ in factor intensities. Firms can choose to locate either in a low wage or a low rental country. For some intermediate levels of trade costs all upstream and downstream firms agglomerate in one country, despite the advantage of lower factor costs in the other country. Whether the industries agglomerate in the low wage or the low rental country depends on the level of trade costs on intermediate and final goods and the relative differences in factor prices.