Understanding the relation between consumer overspending, tariff choices and customer churn is extremely important in many industries. If consumers are insensitive to their overspending and keep making mistakes in tariff choices, firms may profit from overspending and do not have to worry about customer churn. In this paper, using a rich panel data from a major mobile network operator in China, we show evidence that consumers respond to financial incentives and try to reduce overspending by switching to another plan or terminating the relationships with the operator. Given the trade-off between profiting from overspending and reducing customer churn faced by the operator, we conduct a simple policy simulation and show that the operator should encourage consumers to reduce their overspending. We also show that the effects of switching decisions on future overspending and the hazard of churn differ among upward switchers (i.e. consumers who switch to a larger plan) and downward switchers (i.e., consumers who switch to a smaller plan). Specifically, we find that consumers who switch down are more likely to reduce their future overspending, while consumers who switch up are less likely to churn.
{"title":"The Effect of Overspending on Tariff Choices and Customer Churn: Evidence From Mobile Plan Choices","authors":"Haofeng Jin","doi":"10.2139/ssrn.3920263","DOIUrl":"https://doi.org/10.2139/ssrn.3920263","url":null,"abstract":"Understanding the relation between consumer overspending, tariff choices and customer churn is extremely important in many industries. If consumers are insensitive to their overspending and keep making mistakes in tariff choices, firms may profit from overspending and do not have to worry about customer churn. In this paper, using a rich panel data from a major mobile network operator in China, we show evidence that consumers respond to financial incentives and try to reduce overspending by switching to another plan or terminating the relationships with the operator. Given the trade-off between profiting from overspending and reducing customer churn faced by the operator, we conduct a simple policy simulation and show that the operator should encourage consumers to reduce their overspending. We also show that the effects of switching decisions on future overspending and the hazard of churn differ among upward switchers (i.e. consumers who switch to a larger plan) and downward switchers (i.e., consumers who switch to a smaller plan). Specifically, we find that consumers who switch down are more likely to reduce their future overspending, while consumers who switch up are less likely to churn.","PeriodicalId":197385,"journal":{"name":"PSN: Import/Export Strategies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127357286","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper proposes a novel strategy for identifying the effects of import competition on economic outcomes that avoids standard concerns related to the endogeneity of trade policy and provides a consistent measure of exposure to trade over time. Conditioning on the level of import tariffs, our approach exploits cross-industry differences in the relative importance of specific rather than ad valorem tariffs. As they are expressed in per unit terms rather than as a share of value, the effective protection provided by a given specific tariff varies with price levels. Using digitized tariff line data between 1900 and 1940, we relate inflation-driven changes in trade protection to changes in imports and labor market outcomes in the full count U.S. census. We show that our measure predicts import growth at both the industry and county level. Using our measure as an instrument, we show that import competition reduces labor force participation in traded sectors during this period. Labor market effects are widespread but fall most heavily on those with little experience or fewer outside labor market options: the young, seniors, and those in rural areas.
{"title":"Trade Policy as an Exogenous Shock: Focusing on the Specifics","authors":"Andrew Greenland, John W. Lopresti","doi":"10.2139/ssrn.3869026","DOIUrl":"https://doi.org/10.2139/ssrn.3869026","url":null,"abstract":"This paper proposes a novel strategy for identifying the effects of import competition on economic outcomes that avoids standard concerns related to the endogeneity of trade policy and provides a consistent measure of exposure to trade over time. Conditioning on the level of import tariffs, our approach exploits cross-industry differences in the relative importance of specific rather than ad valorem tariffs. As they are expressed in per unit terms rather than as a share of value, the effective protection provided by a given specific tariff varies with price levels. Using digitized tariff line data between 1900 and 1940, we relate inflation-driven changes in trade protection to changes in imports and labor market outcomes in the full count U.S. census. We show that our measure predicts import growth at both the industry and county level. Using our measure as an instrument, we show that import competition reduces labor force participation in traded sectors during this period. Labor market effects are widespread but fall most heavily on those with little experience or fewer outside labor market options: the young, seniors, and those in rural areas.","PeriodicalId":197385,"journal":{"name":"PSN: Import/Export Strategies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-06-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128502041","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We develop a quantitative framework to assess the cross-state implications of a U.S. trade policy change: a unilateral increase in the import tariff from 2 to 25 across all goods-producing sectors. Although the U.S. gains overall from the tariff increase, we find the impact differs starkly across locations. Changes in real consumption (welfare) range from as high as 3.8% in Wyoming to $-0.3% in Florida, depending mainly on how exposed states are to differentially-impacted sectors. As a result, the "preferred'' tariff rate varies greatly across states. Foreign retaliation in trade policy substantially reduces the welfare gains across states, while perpetuating the cross-state variation in those gains. The presence of internal trade frictions amplifies the welfare impacts of changes in trade policy.
{"title":"A Quantitative Analysis of Tariffs across U.S. States","authors":"Ana Maria Santacreu, Michael J. Sposi, Jing Zhang","doi":"10.2139/ssrn.3852201","DOIUrl":"https://doi.org/10.2139/ssrn.3852201","url":null,"abstract":"We develop a quantitative framework to assess the cross-state implications of a U.S. trade policy change: a unilateral increase in the import tariff from 2 to 25 across all goods-producing sectors. Although the U.S. gains overall from the tariff increase, we find the impact differs starkly across locations. Changes in real consumption (welfare) range from as high as 3.8% in Wyoming to $-0.3% in Florida, depending mainly on how exposed states are to differentially-impacted sectors. As a result, the \"preferred'' tariff rate varies greatly across states. Foreign retaliation in trade policy substantially reduces the welfare gains across states, while perpetuating the cross-state variation in those gains. The presence of internal trade frictions amplifies the welfare impacts of changes in trade policy.","PeriodicalId":197385,"journal":{"name":"PSN: Import/Export Strategies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131152108","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Russian Abstract:Предоставлено исследование влияния различных факторов на интенсивность и маршрутизацию потоков российского импорта и экспорта. English Abstract:The study of the influence of various factors on the intensity and routing of Russian import and export flows is provided.
{"title":"Исследование влияния различных факторов на интенсивность и маршуртизацию потоков импорта в Россию и экспорта из России (Study of the influence of various factors on the intensity and routing of imports to Russia and exports from Russia)","authors":"D. Kuznetsov","doi":"10.2139/ssrn.3860729","DOIUrl":"https://doi.org/10.2139/ssrn.3860729","url":null,"abstract":"<b>Russian Abstract:</b>Предоставлено исследование влияния различных факторов на интенсивность и маршрутизацию потоков российского импорта и экспорта. <br><b>English Abstract:</b>The study of the influence of various factors on the intensity and routing of Russian import and export flows is provided.","PeriodicalId":197385,"journal":{"name":"PSN: Import/Export Strategies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131943611","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper develops a multi-sector, multi-country model of international trade and profit shifting which embeds imperfect product markets and markups into Eaton and Kortum (2002)'s Ricardian trade model. Within a country, producers in different sectors face different demand elasticities, and therefore, charge different markups. Moreover, markup distributions for both imports and exports are allowed to vary across countries. We first show theoretically that the gains from trade can depend crucially on the markup distribution for imported goods versus that for exported goods. To then bring the model to the data and to quantify the markup distributions for imports and exports, we estimate both trade elasticities and a rich set of country- and industry-specific import demand elasticities for over 120,000 distinct sector-country pairs and incorporate them into our structural model. We find that cross-country heterogeneities in the markup distribution for exports and imports are an important determinant of the gains from trade and especially the welfare losses from tariffs; By taking markups into account, these losses are up to three times larger (smaller) for net exporters (importers) of high-markup products. Finally, we apply our model to the recent U.S.-China trade war and show that the U.S. experienced significantly higher welfare losses from the tariff war once markups and profit shifting are taken into account, while China slightly benefited overall.
{"title":"Profit Shifting, Import and Export Markups, and the Gains from Trade","authors":"Hamid Firooz, G. Heins","doi":"10.2139/ssrn.3740634","DOIUrl":"https://doi.org/10.2139/ssrn.3740634","url":null,"abstract":"This paper develops a multi-sector, multi-country model of international trade and profit shifting which embeds imperfect product markets and markups into Eaton and Kortum (2002)'s Ricardian trade model. Within a country, producers in different sectors face different demand elasticities, and therefore, charge different markups. Moreover, markup distributions for both imports and exports are allowed to vary across countries. We first show theoretically that the gains from trade can depend crucially on the markup distribution for imported goods versus that for exported goods. To then bring the model to the data and to quantify the markup distributions for imports and exports, we estimate both trade elasticities and a rich set of country- and industry-specific import demand elasticities for over 120,000 distinct sector-country pairs and incorporate them into our structural model. We find that cross-country heterogeneities in the markup distribution for exports and imports are an important determinant of the gains from trade and especially the welfare losses from tariffs; By taking markups into account, these losses are up to three times larger (smaller) for net exporters (importers) of high-markup products. Finally, we apply our model to the recent U.S.-China trade war and show that the U.S. experienced significantly higher welfare losses from the tariff war once markups and profit shifting are taken into account, while China slightly benefited overall.","PeriodicalId":197385,"journal":{"name":"PSN: Import/Export Strategies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-11-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116357149","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article analyses, by region, the trade exposure of Spanish firms to the United Kingdom, based on individual information from the Balance of Payments and the Central Balance Sheet Data Office. Exposure to the UK economy shows some regional variability. Since 2016 there has been a fairly widespread downward trend of this exposure in terms both of nominal exports of goods to the United Kingdom and of the number of companies engaging in this activity. The vulnerability of Spanish export companies to Brexit is, in part, moderated in broad terms by their productivity levels and by the degree of geographical diversification of their exports, which are higher than at firms which trade with the main euro area partners.
{"title":"Spanish Companies Exporting Goods to the United Kingdom: Stylised Features and Recent Developments by Region","authors":"Eduardo Gutiérrez Chacón, César Martín Machuca","doi":"10.2139/ssrn.3729164","DOIUrl":"https://doi.org/10.2139/ssrn.3729164","url":null,"abstract":"This article analyses, by region, the trade exposure of Spanish firms to the United Kingdom, based on individual information from the Balance of Payments and the Central Balance Sheet Data Office. Exposure to the UK economy shows some regional variability. Since 2016 there has been a fairly widespread downward trend of this exposure in terms both of nominal exports of goods to the United Kingdom and of the number of companies engaging in this activity. The vulnerability of Spanish export companies to Brexit is, in part, moderated in broad terms by their productivity levels and by the degree of geographical diversification of their exports, which are higher than at firms which trade with the main euro area partners.","PeriodicalId":197385,"journal":{"name":"PSN: Import/Export Strategies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-08-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115210149","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract :TTservices trade policies and their effects and services in development and growth, the potential role of trade in services as a driver of the productivity performance of sectors that use services as inputs, and the links between services policies and domestic trade costs. Barriers to trade in services have direct as well as indirect effects on cross-border trade and investment, but research suggests that the extent to which countries will benefit from open services regimes and regional integration of services markets depends on complementary efforts to improve economic governance and regulatory regimes.
{"title":"The Development of Trade in Services in Kenya","authors":"Moses Mugabo","doi":"10.2139/ssrn.3665300","DOIUrl":"https://doi.org/10.2139/ssrn.3665300","url":null,"abstract":"Abstract :TTservices trade policies and their effects and services in development and growth, the potential role of trade in services as a driver of the productivity performance of sectors that use services as inputs, and the links between services policies and domestic trade costs. Barriers to trade in services have direct as well as indirect effects on cross-border trade and investment, but research suggests that the extent to which countries will benefit from open services regimes and regional integration of services markets depends on complementary efforts to improve economic governance and regulatory regimes.","PeriodicalId":197385,"journal":{"name":"PSN: Import/Export Strategies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-07-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122691751","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-05-01DOI: 10.5089/9781513545271.001
S. Meleshchuk, Yannick Timmer
In this paper we demonstrate the importance of distinguishing capital goods tariffs from other tariffs. Using exposure to a quasi-natural experiment induced by a trade reform in Colombia, we find that firms that have been more exposed to a reduction in intermediate and consumption input or output tariffs do not significantly increase their investment rates. However, firms’ investment rate increase strongly in response to a reduction in capital goods input tariffs. Firms do not substitute capital with labor, but instead also increase employment, especially for production workers. Reduction in other tariff rates do not increase investment and employment. Our results suggest that a reduction in the relative price of capital goods can significantly boost investment and employment and does not seem to lead to a decline in the labor share.
{"title":"Are Capital Goods Tariffs Different?","authors":"S. Meleshchuk, Yannick Timmer","doi":"10.5089/9781513545271.001","DOIUrl":"https://doi.org/10.5089/9781513545271.001","url":null,"abstract":"In this paper we demonstrate the importance of distinguishing capital goods tariffs from other tariffs. Using exposure to a quasi-natural experiment induced by a trade reform in Colombia, we find that firms that have been more exposed to a reduction in intermediate and consumption input or output tariffs do not significantly increase their investment rates. However, firms’ investment rate increase strongly in response to a reduction in capital goods input tariffs. Firms do not substitute capital with labor, but instead also increase employment, especially for production workers. Reduction in other tariff rates do not increase investment and employment. Our results suggest that a reduction in the relative price of capital goods can significantly boost investment and employment and does not seem to lead to a decline in the labor share.","PeriodicalId":197385,"journal":{"name":"PSN: Import/Export Strategies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115195275","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We are living in interesting times as World moves from Globalisation to De-Globalisation. What is De-Globalisation? For simplification "the movement of several countries wanting to go back to economic and trade policies that put their national interests first". Wherein the policies often take the form of tariffs or quantitative barriers that obstruct free movement of people, products and services among countries. Keeping in mind above definition: Is India really Terrifying (Tariffying) Palm Oil??? Paper will demystify above question and also present impact analysis on Palm exporting & importing countries.
{"title":"Is India Terrifying (Tariffying) Palm Oil??? (Presentation Slides)","authors":"Ali Muhammad Lakdawala","doi":"10.2139/ssrn.3631702","DOIUrl":"https://doi.org/10.2139/ssrn.3631702","url":null,"abstract":"We are living in interesting times as World moves from Globalisation to De-Globalisation. \u0000 \u0000What is De-Globalisation? \u0000 \u0000For simplification \"the movement of several countries wanting to go back to economic and trade policies that put their national interests first\". \u0000 \u0000Wherein the policies often take the form of tariffs or quantitative barriers that obstruct free movement of people, products and services among countries. \u0000 \u0000Keeping in mind above definition: Is India really Terrifying (Tariffying) Palm Oil??? \u0000 \u0000Paper will demystify above question and also present impact analysis on Palm exporting & importing countries.","PeriodicalId":197385,"journal":{"name":"PSN: Import/Export Strategies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-11-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122786675","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The rise in global protectionist tensions in recent years has, after decades of across-the-board declines, entailed increases in tariffs that are proving detrimental to international trade and thereby affecting the Spanish economy’s external sector outlook. This article estimates the effect of tariffs on Spanish non-energy, non-EU goods exports drawing on data broken down by country of destination and type of product. The results show that an increase in tariffs adversely impacts both export possibilities and, persistently, export values. On the estimates made, a 1% increase in import tariffs imposed by another country on a Spanish product entails a reduction in nominal exports of around 0.6%. Protectionist risks underscore the role of the EU in promoting international trade agreements, such as those recently entered into with Japan, Canada and Mercosur.
{"title":"Tariff Protectionist Measures and Spanish Goods Exports","authors":"Eduardo Gutiérrez Chacón, César Martín Machuca","doi":"10.2139/ssrn.3473782","DOIUrl":"https://doi.org/10.2139/ssrn.3473782","url":null,"abstract":"The rise in global protectionist tensions in recent years has, after decades of across-the-board declines, entailed increases in tariffs that are proving detrimental to international trade and thereby affecting the Spanish economy’s external sector outlook. This article estimates the effect of tariffs on Spanish non-energy, non-EU goods exports drawing on data broken down by country of destination and type of product. The results show that an increase in tariffs adversely impacts both export possibilities and, persistently, export values. On the estimates made, a 1% increase in import tariffs imposed by another country on a Spanish product entails a reduction in nominal exports of around 0.6%. Protectionist risks underscore the role of the EU in promoting international trade agreements, such as those recently entered into with Japan, Canada and Mercosur.","PeriodicalId":197385,"journal":{"name":"PSN: Import/Export Strategies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-10-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134580279","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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