Research

"In Too Deep? The Economic Impacts of Deep Trade Agreements" (2024) Working Paper. 

Abstract: As preferential trade agreements (PTAs) have grown in their scope and complexity, so too has the need to capture this heterogeneity in assessments of their effects. This paper demonstrates an approach for estimating the effects of “deep” PTAs that allows for non-linear impacts from increased depth. It finds that deeper PTAs can increase trade but that there are diminishing—and eventually negative—marginal returns from adding additional policy provisions. This finding fits the observation that certain deep policies may represent new frictions to trade rather than facilitation efforts. To illustrate the potential trade and welfare gains that can be attained by increasing the depth of shallow PTAs, a series of counterfactual simulations are undertaken using the Agadir agreement between Egypt, Jordan, Morocco, and Tunisia as an example. The counterfactual analysis suggests that increasing the depth of the relatively shallow Agadir agreement could increase trade between its members by about 13 percent and the value of their real manufacturing outputs by up to 0.3 percent. Notably, the exercise demonstrates that the optimal version of an agreement is not necessarily the deepest. 

"Foreign technological entry, intellectual property rights, and technology diffusion: Evidence from patent filings at the USPTO" (2024) Working Paper, with Charles de Grazia and Hwansung Ju. 

Abstract: Technology diffusion and spillovers are key drivers of both innovation and economic growth. This paper examines the role of obtaining initial intellectual property rights on international knowledge flows, specifically through new technological entrants into the United States. We find causal evidence that a foreign technological entrant's initial patent grant in the host country (the United States) increases the likelihood and frequency of international knowledge flows to local U.S. firms and other patenting entities by 29.4 and 6.9 percent, respectively, as measured using forward patent citations. An initial patent grant also leads to a 29.7 percent increase in the probability that an entrant files at least one subsequent patent application within 5 years, suggesting the significant role that an initial grant can have in a firm's sustained technological presence in the host country. Overall, initial intellectual property rights appear to mitigate impediments to cross-border knowledge flows and the benefits of this outweigh frictions arising from the exclusionary nature of the patents.

"Gravity Estimation: Best Practices and Useful Approaches" (2023) Working Paper.

Abstract: The gravity model has proven to be an exceptionally successful tool for empirically studying international trade. However, deriving good estimates requires careful consideration of the econometric specification being used. Common applications of the model are prone to a variety of biases and identification challenges that should not be overlooked. This paper describes notable approaches for mitigating these issues and provides guidance on how to produce high quality gravity estimates. It also demonstrates how to implement these techniques in Stata. 

Replication materials: github.com/peter-herman/gravity_estimation_best_practices 

"One Nation, One Language? Domestic Language Diversity, Trade and Welfare" (2021), USITC Office of Economics Working Paper 2021-01-B, with Tamara Gurevich, Farid Toubal, and Yoto Yotov.

Abstract: Using new data on linguistic diversity across and within countries, we examine novel channels though which language affects trade patterns and economic welfare. We find that linguistic similarity within a country accounts for about 10 percent of estimated `home bias', demonstrating the importance of shared languages for domestic integration. To highlight the general equilibrium implications of domestic language proximity, we simulate the repeal of Quebec's Bill 101, which made French an official language in Canada and established fundamental language rights for French-speakers. The analysis demonstrates that domestic language diversity has significant implications for Canada's welfare but also sizable economic consequences that stretch far beyond its borders.

"gegravity: General Equilibrium Gravity Modeling in Python" (2021), USITC Office of Economics Working Paper 2021-04-B.

Abstract: The gegravity Python package is a collection of tools for analyzing general equilibrium, structural gravity models of international trade. It provides a framework for estimating structural gravity models, simulating counterfactual trade experiments, and conducting Monte Carlo simulations to derive measures of statistical precision for model estimates. The package is based on prominent models used in the literature and aims to make structural gravity modeling more readily accessible to researchers and policy analysts.

"The Short-run Effects of Product Differentiation on Trade" (2019, update), USITC Office of Economics Working Paper No. 2019-11-A, with Ryan Lee.  

Competitive Conditions Affecting U.S. Exports of Medical Technology to Key Emerging Markets, (2018) USITC Economics Working Paper No. 2018-08-A, with Jeff Horowitz and Mihir Torsekar

The Dynamic Gravity Dataset: 1948--2016, (2018) USITC Economics Working Paper No. 2018-02-A, with Tamara Gurevich

Data Links: https://www.usitc.gov/data/gravity/dataset.htm

"The Gravity of SPS Risk", (2017) USITC Economics Working Paper No. 2017-11-A, with Lesley Ahmed, Caroline Peters, and David Riker.

"How Much Do Non-Tariff Measures Cost? A Survey of Quantification Methods", (2017), USITC Economics Working Paper Series No. 2017-05-C, with Nabil Abbyad.

"Extending the CEPII Gravity Data Set," (2017), USITC Economics Working Paper Series No. 2017-01-A, with Gurevich, Shikher, and Ubee.

Data Links: 1948-2015 (all years), 2007-2015 (updated years).

"Competitive Product Versioning in the Presence of a Network Externality" (2015).  Working Paper

"Endogenous Network Formation and the Provision of a Public Good" (2014). Working Paper