NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Emmanuel Dhyne

National Bank of Belgium
Boulevard de Berlaimont, 14
1000 Brussels
Belgium

E-Mail: emmanuel.dhyne@nbb.be
Institutional Affiliation: National Bank of Belgium

NBER Working Papers and Publications

January 2019The Origins of Firm Heterogeneity: A Production Network Approach
with Andrew B. Bernard, Glenn Magerman, Kalina Manova, Andreas Moxnes: w25441
This paper quantifies the origins of firm size heterogeneity when firms are interconnected in a production network. Using the universe of buyer-supplier relationships in Belgium, the paper develops a set of stylized facts that motivate a model in which firms buy inputs from upstream suppliers and sell to downstream buyers and final demand. Larger firm size can come from high production capability, more or better buyers and suppliers, and/or better matches between buyers and suppliers. Downstream factors explain the vast majority of firm size heterogeneity. Firms with higher production capability have greater market shares among their customers, but also higher input costs and fewer customers. As a result, high production capability firms have lower sales unconditionally and higher sales co...
October 2018Trade and Domestic Production Networks
with Felix Tintelnot, Ayumu Ken Kikkawa, Magne Mogstad: w25120
We use Belgian data with information on domestic firm-to-firm sales and foreign trade transactions to study how international trade affects firms' unit cost and the consumer's real wage. We show theoretically that the gains from trade depend on domestic firm-to-firm linkages. Furthermore, we develop a tractable model of endogenous network formation, allowing firm-to-firm connections to form or break in response to import price changes. Quantitatively, we find that for small import price changes, alternative models that assume a roundabout production structure, despite falsely implying that all firms are connected within one link, yield similar predictions for the change in the real wage to the model that fits the actual linkages between firms. For large changes in the price of foreign good...
July 2017Multi Product Firms, Import Competition, and the Evolution of Firm-product Technical Efficiencies
with Amil Petrin, Valerie Smeets, Frederic Warzynski: w23637
We study how increased import competition affects the evolution of firm-product technical efficiencies in the small open economy of Belgium. We observe quarterly firm-product data at the 8-digit level on quantities sold and firm-level labor, capital, and intermediate inputs from 1997 to 2007, a period marked by stark declines in tariffs applied to Chinese goods. Using Diewert (1973) and Lau (1976) we show how to estimate firm-product quarterly technical efficiencies using a multi-product production (MPP) function that avoids using single-product (SP) production func- tion approximations to it. We find that a 0.01 increase in the import share leads to a 1.05% gain in technical efficiency. This elasticity translates into gains from com- petition over the sample period exceeding 1.2 billion e...
 
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