Reshaping Global Trade: the Immediate and Long-Run Effects of Bank Failures

Xu, Chenzi

doi:10.2139/ssrn.3710455

Cited by 12 publications

(6 citation statements)

References 59 publications

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“…The challenge of this empirical method is to control for all the characteristics of firms that can be jointly associated with the choice of the composition of liabilities and the performance of firms. Xu (2018) applies the same type of identification procedure to measure the consequences of the English banking crisis of 1866 on international trade: all other things being equal, countries exposed to banks with headquarters in London that failed in 1866 exported less in the following decades.…”

Section: The Cost Of Crisesmentioning

confidence: 99%

Money, Banking, and Old-School Historical Economics

Monnet

Velde

2020

SSRN Journal

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We review developments in the history of money, banking, and financial intermediation over the last twenty years. We focus on studies of financial development, including the role of regulation and the history of central banking. We also review the literature of banking and financial crises. This area has been largely unaffected by the so-called new econometric methods that seek to prove causality in reduced form settings. We discuss why historical macroeconomics is less amenable to such methods, discuss the underlying concepts of causality, and emphasize that models remain the backbone of our historical narratives.

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Section: The Cost Of Crisesmentioning

confidence: 99%

Money, Banking, and Old-School Historical Economics

Monnet

Velde

2020

SSRN Journal

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“…They argue these shocks are "idiosyncratic," which our approach formalizes as "independent from relevant country-by-product unobservables." Other recent examples of where our approach may naturally apply are found, for example, in finance (Xu 2019), the immigration literature (Peri et al 2016), and studies of innovation (Stuen et al 2012).…”

Section: Introductionmentioning

confidence: 99%

Quasi-Experimental Shift-Share Research Designs

Borusyak

Hull

Jaravel

2021

The Review of Economic Studies

500

162

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Many studies use shift-share (or “Bartik”) instruments, which average a set of shocks with exposure share weights. We provide a new econometric framework for shift-share instrumental variable (SSIV) regressions in which identification follows from the quasi-random assignment of shocks, while exposure shares are allowed to be endogenous. The framework is motivated by an equivalence result: the orthogonality between a shift-share instrument and an unobserved residual can be represented as the orthogonality between the underlying shocks and a shock-level unobservable. SSIV regression coefficients can similarly be obtained from an equivalent shock-level regression, motivating shock-level conditions for their consistency. We discuss and illustrate several practical insights of this framework in the setting of Autor et al. (2013), estimating the effect of Chinese import competition on manufacturing employment across U.S. commuting zones.

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“…In terms of capital account liberalization, this paper relates most closely to a recent strand of this literature that has explored how increased foreign financial flows affect domestic firms' productivity, sectoral misallocation, and welfare (Alfaro, Chanda, Kalemli-Ozcan, and Sayek, 2004;Gopinath, Kalemli-Özcan, Karabarbounis, and Villegas-Sanchez, 2017;Varela, 2017;Larrain and Stumpner;2017;Saffie, Varela, and Yi, 2020;Xu, 2020;Méndez-Chacón and Van Patten, 2020;Li and Su, 2020;Liu, Wei, and Zhou, 2020). 10 We add to this literature in two ways.…”

Section: Introductionmentioning

confidence: 99%

Misallocation and Capital Market Integration: Evidence From India

Bau¹,

Matray²

2020

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We show that foreign capital liberalization reduces capital misallocation and increases aggregate productivity in India. The staggered liberalization of access to foreign capital across disaggregated industries allows us to identify changes in firms' input wedges, overcoming major challenges in the measurement of the effects of changing misallocation. For domestic firms with initially high marginal revenue products of capital (MRPK), liberalization increases revenues by 25%, physical capital by 57%, wage bills by 27%, and reduces MRPK by 35% relative to low MRPK firms. There are no effects on low MRPK firms. The effects of liberalization are largest in areas with less developed local banking sectors, indicating that foreign capital partially substitutes for an efficient banking sector. Finally, we develop a novel method to use natural experiments to bound the effect of changes in misallocation on treated industries' aggregate productivity. Treated industries' Solow residual increases by 4-17%.

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Reshaping Global Trade: the Immediate and Long-Run Effects of Bank Failures

Cited by 12 publications

References 59 publications

Money, Banking, and Old-School Historical Economics

Money, Banking, and Old-School Historical Economics

Quasi-Experimental Shift-Share Research Designs

Misallocation and Capital Market Integration: Evidence From India

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