Research

The international shipping sector is a vital part of the global trading system but also a large emitter of carbon dioxide emissions. In absence of a multilateral carbon policy for the shipping sector, different countries are starting to impose unilateral measures to decarbonize maritime trade. This paper investigates the impact of unilateral policy on global carbon emissions and welfare by introducing heterogeneous transport technology to a quantitative model of trade. The framework emphasizes the role of transport providers which allocate clean and dirty vessels to shipping routes and thereby determine trade flows, transport cost and emissions in the entire network. Unilateral policy interferes with the allocation process by altering the cost of transport or restricting port access to specific vessel types. Using unique data on ship-level fuel consumption and network traffic, I calibrate the model and study the impact of upcoming unilateral carbon interventions in the EU. I find that (1) carbon taxes can achieve sizeable emission savings as long as transport services are sufficiently elastic, (2) accounting for vessel heterogeneity reduces emission savings by 50% and (3) emission savings are not large enough to raise welfare.

Keywords: Carbon emissions, container shipping, transport network, unilateral policy

Presented at (past and scheduled):
2024: GEP/CEPR PhD Conference (Nottingham), Trade Lunch (Science Po), CESifo Area Conference on Global Economy (LMU), Rocky Mountain Empirical Trade Conference (Banff), Chair of Applied Economics Seminar (ETH Zurich), Young Researcher Seminar (Paris 1), European Trade Study Group (Athens), North American Meeting of the Urban Economics Association (DC), LSE Environment Week (London) .
2023: Georgetown Trade Lunch, Leuven-Louvain Trade Workshop.

In this paper, we move beyond individual firm characteristics to explain export participation and investigate whether firms’ domestic network linkages can facilitate export entry. Using rich data on buyer-seller linkages in the Belgian production network, we find that network heterogeneity is a key determinant of the extensive margin of trade. Firms linked to experienced exporters via their business transaction network have a key advantage in accessing foreign markets. Network effects however do not scale with network size. Instead they decrease as the network becomes large. We show that this pattern is closely linked to negative assortative matching in the network formation process. This indicates that small instead of large firms benefit most from network effects on the extensive margin of trade.

Keywords: Export entry, buyer-seller network, information frictions, trade barriers, heterogeneous firms

Presented at:
2023: ETSG Surrey
2022: NBB Internal Seminar, RIEF Doctoral Meeting, EOS Conference, SMYE, QMUL PhD Workshop and WIEN workshop, Georgetown Trade Lunch, Maryland Trade Lunch
2021: UCD-LCIS PhD Workshop, Leuven-Louvain Trade Workshop.