Using firm-level data on U.S. multinationals, we find that affiliates created for vertical FDI motives seem to be larger and fewer—both within the firm and across affiliates—while affiliates that appear to be created for horizontal FDI motives are smaller and more common. Next, we...

This paper develops a methodology for predicting the impact of trade liberalization on exports by industry (2-digit ISIC) based on the distribution of exports before the reform by product (5-digit SITC). Using the results of Kehoe and Ruhl (2009) that much of the growth in trade after trade...

The United States has borrowed heavily from the rest of the world since the early 1990s. We build a model where this borrowing is driven by foreign demand for saving – a global savings glut – that matches the dynamics of the U.S. trade balance, real exchange rate, sector-level...

We propose a model that can account for both the dynamics of the firm's exports and debt stock along its life cycle, and the short-term responses of large and small exporters to credit shocks. In our model, the demand for external credit results from two different motives: i) to finance fixed...

This appendix contains the original data, constructed data, and full documentation for "Are Shocks to the Terms of Trade Shocks to Productivity?" by Timothy J. Kehoe and Kim J. Ruhl.

We investigate the theoretical relationship between trade policy and growth. We use simple versions of some of the most common international trade models to investigate a number of specific mechanisms by which trade liberalization is thought to enhance growth or productivity: improvements in the...

We find that the sunk entry cost estimated in a model with the necessary convex factor adjustment costs are about 50 percent smaller than they are in a model without other costs of adjustment.

of being an exporting firm falls dramatically. As a result, the entry costs needed to account for the data are 8 times smaller than the value in the benchmark model.

Theories in which firms have heterogeneous productivities, such as those of Melitz (2003) and Chaney (2008), have been successful in capturing this empirical regularity that the average exporting firm is larger than the average nonexporter, but they fail to capture the richness of the...

We construct a model in which aggregate growth is driven by the continual entry of new firms that face barriers to entry that are exacerbated by financial frictions. We show that economies with more severe financial frictions have lower levels of output and consumption along the balanced growth...