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Task Complementarity and Spatial Organization of Firms


Time: 10:00 am- 11:30 am, Apr. 19th, 2024

Speaker: Vladimir Tyazhelnikov

(The University of Sydney)

Venue: 359s, Overseas Exchange Center, Peking University

Platform: Zoom

Meeting ID: 994 5991 6531

Passcode: inse



We introduce a quantifiable model of international production of a complex good that consists of multiple parts. Production of any pair of parts in the same country exhibits pair-specific cost complementarity, and consequently, decisions on production locations are interrelated, which generates rich patterns of clustering. We use input- output and other industry-level data from the United States to estimate the model for US production and find that these complementarity costs are highly heterogeneous across industries and, on average, account for 1.86% of total production costs. Gains from trade associated with the decrease in these costs, which we interpret as non-tariff trade liberalization, are 50% larger than in the case of a decrease in tariffs. Finally, using our model, we construct an index of international integration, that, unlike standard measures, accounts not only for the total costs of parts produced abroad but also what parts are produced and how similar these parts are to one another. We find that this index is a better predictor of the welfare consequences of trade liberalization than conventional measures of offshoring.





Professor Vladimir Tyazhelnikov is an Assistant Professor in the School of Economics at the University of Sydney. His research primarily focuses on International Trade, Industrial Organization, and Economic History, with a particular interest in modeling the complex behaviors of multinational companies and detecting illegal activities using publicly available data. His work has been featured in top economics journals, including the American Economic Journal: Microeconomics and the Journal of International Economics. Professor Tyazhelnikov earned his Ph.D. in Economics from the University of California, Davis, in 2017.