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Economist


International Monetary Fund 

Middle East and Central Asia Department – GCC Countries Division

E-mail: csandoz(-at-) imf.org

Research interests: Macroeconomics, International Economics, Trade and Firms' organization.

Trade, Productivity and (Mis)allocation (with Antoine Berthou, Jong Hyun Chung and Kalina Manova)

August 2020 

We examine the gains from globalization in the presence of firm heterogeneity and potential resource misallocation. We show theoretically that without distortions, bilateral and export liberalizations increase aggregate welfare and productivity, while import liberalization has ambiguous effects. Resource misallocation can either amplify, dampen or reverse the gains from trade. Using model-consistent measures and unique new data on 14 European countries and 20 industries in 1998-2011, we empirically establish that exogenous shocks to export demand and import competition both generate large aggregate productivity gains. Guided by theory, we provide evidence consistent with these effects operating through reallocations across firms in the presence of distortions: (i) Both export and import expansion increase average firm productivity, but the former also shifts activity towards more productive firms, while the latter acts in reverse. (ii) Both export and import exposure raise the productivity threshold for survival, but this cut-off is not a sufficient statistic for aggregate productivity. (iii)  Efficient institutions, factor and product markets amplify the gains from import competition but dampen those from export access.

September 2018

Productivity is the fundamental engine of economic growth. The literature has shown that a large part of productivity loss is due to resource misallocation. However, few studies have introduced traded intermediate inputs in their frameworks. I provide new evidence that decreasing prices of imported intermediate inputs foster aggregate productivity growth by improving resource allocative efficiency. I estimate a structural model with heterogeneous importers using a comprehensive dataset of French firms in manufacturing industries. I then implement a TFP decomposition to quantify the contribution of allocative efficiency in France between 1999 and 2012. One percentage point increase of sourcing goods from China rises annual French TFP growth by 0.2 percentage point. Allocative efficiency explains all aggregate TFP gains from increasing sourcing of cheaper intermediate goods in China.