Essays on International Trade

This Ph.D. thesis consists of three independent chapters that cover different topics of International Economics. While independent, each chapter attempts to contribute to our understanding of international trade.
The first chapter, entitled “Vertically Integrated Multinationals and Productivity Spillovers”, is written together with Federico Clementi and studies how vertical integration of multinational companies affects the productivity spillover to local suppliers. Previous studies have identified that interaction with a foreign company can influence the production of the local company, leading to a productivity spillover. We argue that foreign affiliates of vertically integrated multinational companies will likely source inputs within the boundaries of
their group, and source less from local suppliers. This decrease in interactions with local suppliers reduces the potential for productivity spillovers. Therefore we expect that local suppliers receive a lower productivity spillover from interactions with foreign affiliates of vertically integrated multinational companies compared to spillovers arising from interactions with non-integrated multinational companies. We test our hypothesis using a rich firm-level panel data set of European manufacturing companies. Our results indicate that
productivity spillovers to local suppliers only occur if the foreign affiliate does not belong to a multinational company that is vertically integrated in the industry of the local firm.