Graduate Institute of International and Development Studies
MINT477 - Spring 2025 - Course- 6 ECTS
Thursday 10:15-12:00
Lecturer: Yuan Zi
Office hours: Wednesday 10:15-12:00 (class weeks)
Course Description
Value chain trade and multinational activities have revolutionized the global economy, generating both significant benefits and challenges. On one hand, trade liberalization and the expansion of multinational corporations have fostered economic growth, technological advancement, and cross-cultural exchange. On the other hand, these developments have also raised concerns about the impact of multinational activities on local economies, trade policies, and environmental and labor standards. This course will provide you with a comprehensive understanding of these complex issues, examining the latest research on the economic, political, and social implications of international trade and multinational activities. We will additionally provide a beginner-friendly overview of commonly used econometric/impact evaluation techniques.
Syllabus
Class Materials
Under each lecture, you will find a list of reference papers relevant to the topics covered. While you are not expected to read all of these materials, they are provided for your reference. However, you are expected to read the papers designated for presentation to actively participate in class discussions.
Pre-requisites of the course
The course assumes a basic knowledge of economics and statistics. A bachelor's level in international trade is a plus.
At the start of each lecture, we will have a 15-minute layman's introduction to popular impact evaluation and econometric methods. These mini-sessions will cover topics such as Ordinary Least Squares (OLS), fixed effects, Difference-in-Differences (DiD), event study designs, propensity score matching, and regression discontinuity.
Grading
The grade will depend on class participation (20%), a paper presentation (40%), and an essay (40%).
- Presentation: the presentation will focus on a paper from the presentation list, covering its main contents, contributions to the literature, strengths, and weaknesses.
- Class participation: Students should contribute to in-class discussions, in particular on presentation and the in-class activities proposed by the lecturer.
- Essay: the essay will be a no more than five-page summary or discussion of what you learned from the class—either an overview or a focus on a class-covered topic. Prioritize brevity and articulate explanations.
- Follow academic practices and cite properly. Plagiarism leads to a zero grade.
- The essay should be written in word (with EB Gramond font, 12pt, single space) or in latex.
Teaching plan (preliminary)
- Week 1. International Trade Patterns
- Week 2. Introduction to Multinational (MNE) Activities
- Week 3. The Economics of Multinational Corporations I
- Week 4. The Economics of Multinational Corporations II
- Week 5. The Empirics of Multinational Corporations
- Week 6. MNE Activities and Local Firms I
- Week 7. MNE Activities and Local Firms II
- Week 8. MNE Activities and Innovation
- Week 9. MNE and Labor Market Outcomes
- Week 10. MNE Activities and Local Development
- Week 11. MNE Activities and the Environment
- Week 12. MNE Activities and Tax Avoidance
- Week 13. Local and Global Policy Coordination on MNEs
- Week 14. Exam Week
Outline (preliminary)
Chapter 1. International Trade Patterns
Readings:
- Bordo, Michael D., Alan M. Taylor, and Jeffrey G. Williamson, eds. Globalization in historical perspective. University of Chicago Press, 2007.
- Leamer, Edward E. "A flat world, a level playing field, a small world after all, or none of the above? A review of Thomas L. Friedman's The World is Flat." Journal of Economic Literature 45.1 (2007): 83-126.
Chapter 2. Introduction to Multinational (MNE) Activities
Readings:
- Bernard, Andrew B., J. Bradford Jensen, and Peter K. Schott. "Importers, exporters and multinationals: a portrait of firms in the US that trade goods." Producer dynamics: New evidence from micro data. University of Chicago Press, 2009. 513-552.
- Bernard, Andrew B., J. Bradford Jensen, Stephen J. Redding, and Peter K. Schott. "The margins of US trade." American Economic Review 99, no. 2 (2009): 487-493.
- Bernard, Andrew B., et al. "Firms in international trade." Journal of Economic perspectives 21.3 (2007): 105-130.
- Ramondo, Natalia, Andrés Rodríguez-Clare, and Felix Tintelnot. "Multinational production: Data and stylized facts." American Economic Review 105.5 (2015): 530-536.
Paper for presentation:
- Fort, Teresa C. 2023. "The Changing Firm and Country Boundaries of US Manufacturers in Global Value Chains." Journal of Economic Perspectives, 37 (3): 31-58.
Chapter 3. The Economics of Multinational Corporations
Readings:
- Antràs, Pol, and Stephen R. Yeaple. "Multinational firms and the structure of international trade." Handbook of international economics 4 (2014): 55-130.
Paper for presentation:
- Helpman, Elhanan, Marc J. Melitz, and Stephen R. Yeaple. "Export versus FDI with heterogeneous firms." American economic review 94.1 (2004): 300-316.
Chapter 4. The Empirics of Multinational Corporations
Readings:
- Antràs, Pol, and Stephen R. Yeaple. "Multinational firms and the structure of international trade." Handbook of international economics 4 (2014): 55-130.
- Nunn, Nathan. "Relationship-specificity, incomplete contracts, and the pattern of trade." The quarterly journal of economics 122.2 (2007): 569-600.
Paper for presentation:
- Fort, Teresa C., Justin R. Pierce, and Peter K. Schott. "New perspectives on the decline of US manufacturing employment." Journal of Economic Perspectives 32.2 (2018): 47-72.
Chapter 5. MNE Activities and Local Firms
Readings:
- Aitken, Brian J., and Ann E. Harrison. "Do domestic firms benefit from direct foreign investment? Evidence from Venezuela." American economic review 89.3 (1999): 605-618.
- Javorcik Beata, S., "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers through Backward Linkages," American Economic Review, 94 (2004), 605--627.
- Greenstone, Michael, Richard Hornbeck, and Enrico Moretti. "Identifying agglomeration spillovers: Evidence from winners and losers of large plant openings." Journal of political economy 118.3 (2010): 536-598.
- Alfaro-Urena, Alonso, Isabela Manelici, and Jose P. Vasquez. "The effects of joining multinational supply chains: New evidence from firm-to-firm linkages." The Quarterly Journal of Economics 137.3 (2022): 1495-1552.
Paper for presentation:
- Keller, Wolfgang. "International technology diffusion." Journal of economic literature 42.3 (2004): 752-782.
Chapter 6. MNE Activities and Innovation
Readings:
- Guadalupe, Maria, Olga Kuzmina, and Catherine Thomas. "Innovation and foreign ownership." American Economic Review 102.7 (2012): 3594-3627.
- Bilir, L. Kamran, and Eduardo Morales. "Innovation in the global firm." Journal of Political Economy 128.4 (2020): 1566-1625.
- Arkolakis, Costas, et al. "Innovation and production in the global economy." American Economic Review 108.8 (2018): 2128-2173.
Paper for presentation:
- Bilir, L. Kamran. "Patent laws, product life-cycle lengths, and multinational activity." American Economic Review 104.7 (2014): 1979-2013.
Chapter 7. MNE and Labor Market Outcomes
Readings:
- Setzler, Bradley, and Felix Tintelnot. "The effects of foreign multinationals on workers and firms in the United States." The Quarterly Journal of Economics 136.3 (2021): 1943-1991.
- Ureña, Alonso, et al. Responsible Sourcing? Theory and Evidence from Costa Rica. No. 17723. CEPR Discussion Papers, 2022.
Paper for presentation:
- Alfaro-Urena, Alonso, Isabela Manelici, and Jose P. Vasquez. The effects of multinationals on workers: evidence from costa rican microdata. Working Paper, 2021.
Chapter 8. MNE Activities and Local Development
Readings:
- Méndez, Esteban, and Diana Van Patten. "Multinationals, monopsony, and local development: Evidence from the united fruit company." Econometrica 90.6 (2022): 2685-2721.
Paper for presentation:
- Dell, Melissa, and Benjamin A. Olken. "The development effects of the extractive colonial economy: The dutch cultivation system in java." The Review of Economic Studies 87.1 (2020): 164-203.
Chapter 9. MNE Activities and the Environment
Readings:
- Levinson, Arik, and M. Scott Taylor. "Unmasking the pollution haven effect." International economic review 49.1 (2008): 223-254.
- Garcia-Lembergman, Ezequiel, et al. (2023) "The Carbon Footprint of Multinational Production." Unpublished Manuscript.
Paper for presentation:
- Perino, Grischa, Robert A. Ritz, and Arthur Van Benthem. Understanding overlapping policies: Internal carbon leakage and the punctured waterbed. National Bureau of Economic Research, 2019.
Chapter 10. MNE Activities and Tax Avoidance
Readings:
- Tørsløv, Thomas, Ludvig Wier, and Gabriel Zucman. "The missing profits of nations."
- Dharmapala, Dhammika. 2019. "Profit Shifting in a Globalized World." AEA Papers and Proceedings, 109: 488-92.
- Bustos, Sebastián, et al. The race between tax enforcement and tax planning: Evidence from a natural experiment in chile. No. w30114. National Bureau of Economic Research, 2022.
- Guvenen, Fatih, et al. "Offshore profit shifting and aggregate measurement: Balance of payments, foreign investment, productivity, and the labor share." American Economic Review 112.6 (2022): 1848-1884.
Paper for presentation:
- Gumpert, Anna, James R. Hines Jr, and Monika Schnitzer. "Multinational firms and tax havens." Review of Economics and Statistics 98.4 (2016): 713-727.
Chapter 11. Local and Global Policy Coordinations on MNEs
Readings:
- Wang, Zi. "Multinational production and corporate taxes: A quantitative assessment." Journal of International Economics 126 (2020): 103353.
- Deng, Jianpeng, et al. Local corporate taxes and the geography of foreign multinationals. Working Paper, 2023.
Paper for presentation:
- Garrett, Daniel, and Juan Carlos Suárez Serrato. 2019. "How Elastic is the Demand for Tax Havens? Evidence from the US Possessions Corporations Tax Credit." AEA Papers and Proceedings, 109: 493-99.