From the Editor

Abstract

Dear Readers, Welcome to the third issue of The International Trade Journal (ITJ)’s thirtyseventh volume. The articles in this issue focus on firm behavior related to trade. The articles look at how entry by Chinese firms affected Brazilian firms, how the end of the multi-fiber agreement (MFA) affected Indian garment and textile firms, how market size and competition affect firms’ export diversification, how financial constraints affect firm productivity, and how characteristics of CEOs affect the likelihood that a firm will expand internationally. The first article in this issue, by Mauricio Moreira, Marisol Rodriguez Chatruc, Filipe Lage, and Federico Merchan, looks at how pressure from Chinese imports affected Brazilian firms between 2000 and 2013. The authors focus on this period because it covers the period just before and following China’s entry into the World Trade Organization in December 2001. The authors find that increased Chinese imports modestly increased productivity among Brazilian firms exposed to this competition. In contrast, increased competition with Chinese imports appears to have reduced employment growth and innovation at these same firms. The results for innovation, however, are less robust than the results for productivity. The second article, by Tanveer Ahmad Khan, looks at how the end of the MFA affected Indian garment and textile firms. Using difference-in-difference estimation, the author finds that after the MFA ended, Indian firms increased export revenues, sales, and total assets in sub-sectors where firms had faced binding quotas while the MFA was in place. Using product-level data, the authors also find that prices of Indian quota-constrained products fell by 39% after the quotas were removed. This suggests that the rise in export revenue was due to firms exporting more rather than to higher prices. The third article, by Aya Elewa and Chahir Zaki, looks at how market size and competition affect within-firm export product diversification. Using data from Egyptian firms from between 2005 and 2016, the authors find that firms’ exports tend to be less concentrated in destination countries with larger and less competitive markets. They note that their results are stronger and more robust for larger firms than they are for smaller firms.