Date of Award
Doctor of Philosophy (PhD)
Baier, Scott L
Tamura , Robert F
Jerzmanowski , Michal M
Tsui , Kevin K
This dissertation consists of three chapters. The first two chapters investigate the correlation between banking crises and bilateral trade flows. In the first chapter, we focus on how banking crises may impact the bilateral trade flows over time. We attempt to disentangle the financial shocks' impacts on trade flow by factors that are related to exporters and importers. The second chapter assesses how banking crises impact the extensive and intensive margin of the trade. The third chapter attempts to use frontier model to analyze the bidding behaviors and collusion in the different submarkets of low-price, sealed-bid construction procurement.
Since 2007 banking crisis and the onset of Great Recession, there have been many studies that have provided insights linking between the Great Recession and dramatic fall in trade. The objective of Chapter 1 is to investigate the impact of banking crises more generally. We use the data for 173 countries and across 32 years. We find relatively robust results for the correlation between banking crises and bilateral trade flow fluctuations. Most of the impacts from banking crises go through the importers. There seems to be little evidence to support the hypothesis that banking crises directly lowers the exports. There is a relative constant negative impact on import for the time periods in advance of the onset of crises. After the crisis is over, the decline in import tends to intensified for another two years and starts to recover.
Chapter 2 decomposes the bilateral trade flow into extensive margin and intensive margin. The results suggest different patterns of the financial shocks for exporters and importers in different margins. For exporters, the insignificant result from Chapter 1 is caused by neutralization of the opposite effects from extensive and intensive margin. During banking crisis exporters tend to export fewer varieties of goods and increase the volume for each variety. For importers, a banking crisis tends to have a larger negative impact on extensive margin and relatively smaller impacts on intensive margin.
Chapter 3 adopts a frontier model to analyze the bidding behaviors and collusions in low-price, sealed-bid procurement. In a market without collusion, the objective function of each bidder is to maximize their own expect profit. In a market with collusion, the objective function is to maximize profit than separated profit between colluders. The bidding data from real world are usually the mixture of these two cases. Using frontier model can avoid the explicit objective function and give a hint about whether there might be collusion in a market.
Mu, Yifei, "BANKING CRISES AND THE VOLUME OF TRADE" (2013). All Dissertations. 1190.