Research

My research focuses on the effect of firms' strategic behavior and market power on international trade.

Working papers

Price Discrimination and Competition in International Transportation

Best Paper Award at the 24th Spring Meeting of Young Economists, 2020

This paper uses uniquely detailed freight price data to study the determinants of transportation costs and their implications as a trade friction. I document empirical regularities violating both the Law of One Price in the shipping industry and the "iceberg" trade cost assumption. I show that conditional on the shipment's value, freight prices fall with the shipment's and exporter's size within narrowly defined routes. I then develop a trade model that integrates both economies of scale and price discrimination as mechanisms generating these findings. Finally, I test the model and provide causal evidence of competition affecting price dispersion using an exogenous weather-related shock as an instrument to competition. This shows price discrimination affects transportation costs. The implication is that competition increases the extent of quantity discounts thus giving further advantage to larger firms in international trade.

The Market Power of Buyers and Sellers in International Trade R&R at American Economic Journal: Microeconomics

Price dispersion across buyers within product categories is commonly explained by quality differences in international trade. I use a uniquely fine-grained trade dataset which includes seller names and product descriptions to decompose price dispersion while accounting for quality. Surprisingly, I find substantial residual price variation across buyers of nearly identical products from the same seller. I show these price residuals are strongly negatively correlated with buyer size, which explains 25% of price dispersion across buyers. This is not driven by scale economies or intra-firm trade and suggests market-power mechanisms. To rationalize this finding, I integrate basic industrial organization models into an international trade framework. I show classic oligopolistic price discrimination and oligopsony both imply a positive buyer size - price relationship and cannot explain my findings. However, the data is consistent with price discrimination if larger buyers have outside options that allow them to demand discounts from their suppliers. This has three implications. First, by countervailing the market power of sellers, larger buyers can increase pass-through of global shocks along value chains. Second, countervailing power upstream gives further advantage to initially more productive firms downstream thus increasing firm heterogeneity. Third, larger buyers gain more from output trade liberalization through additional input price reductions.

Making America Great Again? The Economic Impacts of the Liberation Day Tariffs (with Ahmad Lashkaripour, Luca Macedoni, and Ina Simonovska)

On April 2, 2025, President Trump announced "Liberation Day," imposing broad tariffs on imports to reduce trade deficits and revive U.S. industry. We analyze the long-term economic effects of these tariffs, finding that while they may improve U.S.'s terms of trade if trading partners do not retaliate, any welfare gains vanish under reciprocal retaliation. Assuming no retaliation, we derive the optimal U.S. tariff rate, which is approximately 25% and uniformly applied across all trade partners. This optimal structure stands in stark contrast to the USTR's proposed tariff schedule, which varies by trading partner and is based on bilateral trade deficits. When trading partners retaliate optimally against the USTR-proposed tariffs, the U.S. experiences a welfare loss of nearly 1%, while partner countries offset virtually all the initial losses. The resulting tariff war, however, reduces global employment by 0.5%. Although the tariffs do succeed in reducing the U.S. trade deficit, the resulting deadweight losses underscore the inefficiency of using protectionist trade policy as a tool for deficit reduction.

Frequency of Shipment and Gains from Trade (with Konstantin Kucheryavyy and Ruo Shangguan)

We extend the Melitz (2003) heterogeneous firms trade model by introducing variable marginal costs of exporting. Our model allows marginal export costs to depend flexibly on shipment quantity, beyond traditional iceberg trade costs. We provide microfoundations for these costs using a firm's inventory management problem. Assuming Pareto-distributed firm productivities, our model generates a gravity equation and a welfare gains formula that generalizes the Arkolakis et al. (2012) formula. The key parameter in our welfare formula can be estimated using exporters' shipment frequency. Using Colombian firm-to-firm customs data, we estimate this parameter and calibrate all trade costs. Our findings reveal that while the ad-valorem equivalent rate of exporting costs is minimal for highly productive firms, it becomes substantial for less productive ones.

Works in progress

The Effect of Competition on Prices in Firm-to-Firm Trade: Evidence from the Russian Food Embargo (Preliminary slides)

Motivated by the global trends towards higher market concentration and production fragmentation, I study how international competition affects firms' strategic interactions in global value chains. I develop a model of international trade with oligopolistic sellers, who can vary prices across their heterogeneous buyers and in response to competition. It predicts a negative relationship between a price charged to a buyer and the buyer size and allows me to study how competition among sellers affects this relationship. I test the model's predictions using firm-to-firm transactions of relatively homogeneous food products imported to Russia in 2013 - 2016. I exploit a retaliatory food embargo imposed on these products in 2014 in response to international sanctions against Russia as a plausibly exogenous shock to international competition. I find that when faced with fewer competitors, sellers offer smaller discounts to larger buyers. This finding has implications for distributional effects of trade. They suggest that all else equal, consumers purchasing imported goods from larger importers can gain more from trade.

Intermediaries and Long-Term Contracts in Maritime Transportation (with Haiying Jia, Francois-Charles Wolff, and Pierre Cariou)

Competition, Consumer Biases, and Firm Pricing Strategies (with Sam Hirshman and Alina Ozhegova)

Policy-related work

Global Value Chains: What are the Benefits, and Why Do Countries Participate? (with Faezeh Raei and Borislava Mircheva) IMF Working Papers, 19/18, 2019