AbstractsEconomics

This dissertation was prepared as a collection of 4 research articles in the field of international trade with a focus on gravity modeling and estimation for international trade and migration and on domestic firm-level labor market effects of internationalization. Chapter 2 structurally estimates a micro-founded gravity equation for migration flows. For a sample of 33 European Union (EU) and OECD countries, the effects on immigration from two scenarios are quantified. First, it provides the direct and indirect immigration effects of Turkey becoming a member of the European Union. Second, it evaluates a deeper integration of the European Union single market from lowered language barriers. Comparative static results differ quantitatively and qualitatively from predictions of consistently estimated coefficients. First, comparative static effects on immigration are substantially lower and second, immigration in third countries is affected negatively by bilaterally decreased migration frictions. Chapter 3 asks how the welfare quantification of trade liberalization changes if one allows workers to be mobile within established frameworks. This chapter therefore provides a first structurally estimable model of international trade with endogenous international migration choices of workers. We use the model for an ex ante comparative static welfare quantification of the Transatlantic Trade and Investment Partnership. We use dyadic trade and migration data for 36 OECD countries and find that quantitative welfare predictions change if workers are allowed to migrate. The results are informative about the complex welfare changes of international economic integration agreements with respect to the interaction of trade and migration frictions. Chapter 4 contributes to the literature that tries to explain why the observation of reduced frictions with respect to international trade due to globalization does not show up if one infers elasticities of these frictions with established tools. It employs a newly developed gravity equation estimator. Within three different data sets it finds that the distance coefficient increases over time when standard estimators are used, while a non-linear estimation of the newly developed estimation leads to a decline in the distance coefficient over time. This shows that the distance puzzle, thus, arises from a growing bias of standard estimates. The latter can be explained by an increase of the importance of the bias from omitting the number of heterogeneous exporting firms relative to the bias from omitting zero trade flows. Chapter 5 investigates why domestic labor market effects of firm's internationalization strategies might differ across empirical studies. This chapter precisely investigates the effects of offshoring and FDI on German establishment employment. It compares different modes and measures of offshoring and FDI and employs two different micro-data sets in a unified methodical framework. The results confirm positive employment effects from different FDI measures which we find in the… Advisors/Committee Members: Larch, Mario (advisor).