Paris School of Economics
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Industrial and Trade Policy in Supply Chains: The Case of Rare Elements
Seminar
Location 48 Boulevard Jourdan, 75014 Paris, France
Location TBA
Presence On site
Hourly –
speaker : Harald Fadinger
Industrial and Trade Policy in Supply Chains: The Case of Rare Elements
Industrial policies, traditionally aimed at boosting the competitiveness of protected sectors, can inadvertently drive productivity growth in downstream sectors abroad. The paper presented in this Mannheim Applied Seminar provides evidence for this mechanism by examining the case of rare earth elements – essential inputs for many manufacturing products and the green transformation. To measure the importance of rare earth inputs across manufacturing industries, the authors construct an input-output table that incorporates individual rare earth elements as inputs. They find that exports in rare earthintensive downstream sectors outside of China increased after the Chinese supply restrictions on rare earths. Using data on patents and sector TFP, the authors then show that this uptake in exports coincides with a surge in innovation towards more efficient usage of rare earth inputs. They develop a trade model with directed technical change that explains these findings, showing that industrial policy can shift the direction of innovation and drive growth in downstream sectors abroad when inputs are gross complements. The authors also introduce a new method for estimating production elasticities based on innovation direction and relative input prices, consistent with their trade model, and find evidence for rare earths being complementary production inputs.
Harald Fadinger
Harald Fadinger is a professor of economics at the University of Vienna. He is also a Research Fellow in the areas Trade and Regional Economics and Climate Change and the Environment at the Centre for Economic Policy Research (CEPR), London/Paris, and a Senior Research Fellow at the Institute for Advanced Studies (IHS) Vienna.
His main research interests are international trade, economic growth, international macroeconomics, organizational economics and environmental economics.
His current research focuses on international competitiveness, productivity, trade policy and trade agreements, economic linkages and global value chains, labor markets, firm organization and the link between trade and the environment.
The Globalization Chair aims to create a privileged forum for reflection, exchange and transfer between researchers and all entities of society interested in the reconfiguration of globalization and its implications. The approach favored by the chair is empirical. The research is characterized by the use of advanced econometric techniques and the exploitation of various databases combining data from companies, but also more recent sources from the media, NGOs or the monitoring of container ships.
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Paris School of Economics