Essays on tariff pass-through and spillover effect.

摘要

Essay 1 is the first attempt to explore tariff pass-through at the firm level, and to investigate how it depends on firm heterogeneity in productivity and product differentiation in quality. Using an extended version of the Melitz and Ottaviano (2008) model, the essay shows that exporting firms absorb tariff changes by adjusting both their markups and product quality, which leads to an incomplete tariff pass-through. Moreover, the absolute value of tariff absorption elasticity negatively depends on firm productivity for products with high scope for quality differentiation, but positively depends on firm productivity for products with low scope for quality differentiation. Essay 2 studies how market structure impacts tariff pass-through. The essay explores this with a model in which both export firms and import firms have some market power. It shows that tariff pass-through is negatively related to the market power of export firms, but is ambiguously related to the market power of import firms. This is due to the impact of their market power on the markup distribution between export firms and import firms. Essay 3 studies how tariff changes of a country impact trade prices between its trade partners. The essay uses a simple model to show that, when a foreign country reduces its tariffs (either MFN or non-MFN tariffs), domestic exporting firms raise their prices toward third countries, which is referred to as "tariff spillover effect". The existence of the effect depends on the assumption of increasing marginal cost. The essays use the U.S. transaction-level export or import data and find empirical evidence for the predictions of the models.