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New Data and New Facts for the Global Economy

Paper Session

Friday, Jan. 4, 2019 2:30 PM - 4:30 PM

Atlanta Marriott Marquis, A707
Hosted By: American Economic Association & Committee on Economic Statistics
  • Chair: Natalia Ramondo, University of California-San Diego

Churning and Reallocation in a Firm-to-Firm Production Network

Andrew B. Bernard
,
Dartmouth College
Glenn Magerman
,
Free University of Brussels
Andreas Moxnes
,
University of Oslo

Abstract

This paper presents new facts on the evolution of buyer-seller linkages in a domestic production network providing new evidence on firm size dynamics. With data covering all the VAT-eligible firms in Belgium from 2002 -2014, we find substantial churning of suppliers and buyers every year with the median (mean) buyer-supplier connection lasting one (1.5) year. More than 45 percent of connections and 25 of connection value are new in any given year and added and dropped connections come disproportionately from pairs of continuing firms. As firms grow, they add
buyers and suppliers even as the sales distribution across their buyers is relatively unchanged. This invariance is coupled with substantial growth in the pairwise transaction value over the lifespan of the connection and smaller than average values in new connections.

United States Exporters: New Evidence

Stefania Garetto
,
Boston University
Lindsay Oldenski
,
Georgetown University
Nitya Pandalai­‐Nayar
,
University of Texas-Austin
Natalia Ramondo
,
University of California-San Diego

Abstract

We document a comprehensive set of facts about U.S. owned exporters. We compare the behavior of U.S. exporters located within the U.S. with the behavior of U.S. owned exporters located abroad-­‐i.e., foreign affiliates of U.S. multinational firms. We bring together firm-­‐level data from the U.S. Census Bureau and from the Bureau of Economic Analysis (BEA) that span many years and industries. While the Census data have rich information on the export activities of U.S.–based firms, the BEA data contain detailed information on the activity of foreign affiliates of U.S. multinational firms, in particular, their export activities. This permits a novel comparison in the literature between ``domestic’’ and ``affiliate’’ exporters,
both for the cross section and time series-­‐in particular, regarding firms’ life-‐cycle dynamics. These facts are aimed at better informing models of exporters and multinational firms behavior.

Multinational Profit Shifting and Measures throughout Economic Accounts

Jennifer Bruner
,
U.S. Bureau of Economic Analysis
Dylan G. Rassier
,
U.S. Bureau of Economic Analysis
Kim J. Ruhl
,
Pennsylvania State University

Abstract

Profit shifting to low-tax countries imposes challenges for the treatment of multinational enterprises in economic accounts. Using adjustments for profit shifting calculated in Guvenen et al. (2017) under an alternative measurement methodology, this paper empirically demonstrates how the effects of profit shifting cascade throughout a fully articulated set of economic accounts for the United States in 2014. We find a 1.5 percent and 3.5 percent increase in measured U.S. gross
domestic product and operating surplus, respectively, and a 33.5 percent decrease in measured income receivable from the rest of world. As a result of offsetting effects, measured U.S. gross national saving decreases by 0.8 percent, and national borrowing increases by 6.9 percent. There are also potentially significant implications for analytic uses of the measures, including decreases for the labor share of income and the return on U.S. direct investment abroad of 1.4 to 2.4 percentage
points and 4.3 percentage points, respectively, and increases for the trade in services balance as a percentage of GDP and the return on domestic non-financial business of 1.4 percentage points and 1.3 percentage points, respectively.
JEL Classifications
  • F6 - Economic Impacts of Globalization