International Trade: Determinants of Patterns and Policy Impacts

Abstract

International trade is shaped by various factors affecting firms— the main trade actors— and the economic environment in which they operate. This economic environment may relate to country and country-pair specific factors and policies; the formation and deformation of economic agreements; and the global factors and policies that affect the overall functioning of the trading system. Changes in factors affecting firms and their economic environment can affect trade patterns directly and indirectly, interacting with the rest of the economy. The research presented in this thesis analyzes the relevance of factors at different scales (firm level, country level, economic partnership level, and global level) in shaping international trade patterns and their consequences beyond trade impacts. It also introduces several theoretical, methodological, and data contributions that advance such analyses. Overall, this research highlights that factors at different scales may relate to firms' fixed and variable costs and product prices. Changes in those factors, as long as they are aligned with firms' profitability, can increase firms' trade activities. As firms increase their trade activities, their performance measures may improve. This involves impacts on the environment in which firms operate.