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Mobility and information flows in international trade and investment

  • Author(s): Poole, Jennifer Pamela
  • et al.
Abstract

This dissertation contains three self-contained chapters on international trade, labor, and development economics, with a special emphasis on Brazil. In particular, I investigate how worker mobility and individual interactions help to transfer information in an economy. Using new and little-explored data, I consider two broad topics related to globalization : how knowledge spillovers result from international integration and how networks of individuals create trade. In a third chapter, I explore how globalization contributes to interstate worker mobility in Brazil. Labor turnover is a commonly-cited mechanism for the transmission of spillovers from multinational to domestic firms, but until now there has been little direct evidence for this mechanism. In the first chapter, using a novel matched establishment-worker database from Brazil, I present evidence consistent with the existence of positive multinational spillovers through worker mobility in Brazil. The main results suggest that the magnitude of wage spillovers from multinational establishments depends on the sector and worker under consideration. The results are consistent with the hypothesis that higher-skilled former multinational- establishment workers are better able to convey information and higher-skilled incumbent domestic workers are better able to absorb information. The importance of business and social networks in generating trade is becoming increasingly recognized in the international economics literature. An important way in which people build and maintain networks is through face-to-face meetings. In the second chapter, I propose an empirical model in which there exists a fixed cost to entering a new country market. The fixed cost, in the form of prior business travel, generates international export sales. The empirical evidence, using a unique survey of all outbound travelers from the U.S. on international flights, which differentiates between business and leisure travel and export volumes and varieties, supports the model. Lagged business travel from the United States has a positive effect on export varieties from the United States. The effect is driven by travel to non-English speaking countries, for which communication with the U.S. by other means may be less effective. Moreover, the effect is stronger for higher-skilled travelers, reflecting an enhanced ability to transfer information about trading opportunities. In the third chapter, I use a unique linked employer-employee database to study the relationship between globalization and formal-sector interstate migration in Brazil, and pay special attention to the self -selection bias associated with the migration decision. I follow Dahl (2002) and estimate the worker's multi-choice migration problem. In the absence of employer-level information on foreign ownership and exporting status, state-level covariates would exhibit considerable omitted variable bias. The results provide support for the idea that globalization acts on internal migration through the growth of employment opportunities at locations with a high concentration of foreign-owned establishments and the stability of employment at exporting establishments

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