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An Anatomy of U.S. Establishments' Trade Linkages in Global Value Chains
June 2025
Working Paper Number:
CES-25-44
Global value chains (GVC) are a pervasive feature of modern production, but they are hard to measure. Using confidential microdata from the U.S. Census Bureau, we develop novel measures of the linkages between U.S. manufacturing establishments' imports and exports. We find that for every dollar of exports, imported inputs represent 13 cents in 2002 and 20 cents by 2017. Examining GVC trade flows in a gravity framework, we find that these flows are higher within 'round-trip' (input and output market is the same) linkages, regional trade agreements, and multinational firm boundaries. The strong complementarities between input and output markets are muted by the proportionality assumptions embedded in global input-output tables. Finally, with an off-the-shelf model, we show the round-trip results can be obtained when firm-specific sourcing and exporting fixed costs are linked.
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Exploring the Hiring, Pay, and Trading Patterns of U.S. Firms: The Dominance of Multinationals Engaged in Related-Party Trade
December 2024
Working Paper Number:
CES-24-77
We link U.S. job records with both firm-level business register and customs records to construct a novel set of summary statistics and descriptive regressions that highlight the central role played by the small set of multinational firms (denoted RP XM firms) who engage in both importing and exporting with related parties in translating international trade shocks to shifts in labor demand. We find that RP XM firms 1) dominate trade volumes; 2) account for very disproportionate shares of national employment and payroll; 3) employ greater shares of workers in higher pay deciles; 4) disproportionately poach other firms' high paid workers; 5) offer higher raises to their existing workers. These hiring and pay patterns generally exist even among new RP XM firms, but strengthen with RP XM tenure, and continue to hold, albeit at smaller magnitudes, after conditioning on standard proxies for firm and worker productivity. Taken together, these findings reveal that RP XM status is a reliable proxy for the kind of firm that drives the initial labor market impacts of trade shocks, and that high paid workers are likely to be most directly exposed to such shocks.
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Aggregation Bias in the Measurement of U.S. Global Value Chains
September 2024
Working Paper Number:
CES-24-49
This paper measures global value chain (GVC) activity, defined as imported content of exports, of U.S. manufacturing plants between 2002 and 2012. We assesses the extent of aggregation bias that arises from relying on industry-level exports, imports, and output to establish three results. First, GVC activity based on industry-level data underestimate the actual degree of GVC engagement by ignoring potential correlations between import and export activities across plants within industries. Second, the bias grew over the sample period. Finally, unlike with industry-level measures, we find little slowdown in GVC integration by U.S. manufacturers.
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Supply Chain Adjustments to Tariff Shocks: Evidence from Firm Trade Linkages in the 2018-2019 U.S. Trade War
August 2024
Working Paper Number:
CES-24-43
We use the 2018-2019 U.S. trade war to examine how supply chains adjustments to a tariff cost shock affect imports and exports. Using confidential firm-trade linked data, we show that the decline in imports of tariffed goods was driven by discontinuations of U.S. buyer'foreign supplier relationships, reduced formation of new relationships, and exits by U.S. firms from import markets altogether. However, tariffed products where imports were concentrated in fewer suppliers had a smaller decline in import growth. We then construct measures of export exposure to import tariffs by linking tariffs paid by importing firms to their exported products. We find that the most exposed products had lower exports in 2018-2019, with most of the impact occurring in 2019.
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The Rise of Specialized Firms
February 2024
Working Paper Number:
CES-24-06
This paper studies firm diversification over 6-digit NAICS industries in U.S. manufacturing. We find that firms specializing in fewer industries now account for a substantially greater share of production than 40 years ago. This reallocation is a key driver of rising industry concentration. Specialized firms have displaced diversified firms among industry leaders'absent this reallocation concentration would have decreased. We then provide evidence that specialized firms produce higher-quality goods: specialized firms tend to charge higher unit prices and are more insulated against Chinese import competition. Based on our empirical findings, we propose a theory in which growth shifts demand toward specialized, high-quality firms, which eventually increases concentration. We conclude that one should expect rising industry concentration in a growing economy.
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U.S. Market Concentration and Import Competition
August 2022
Working Paper Number:
CES-22-34
Many studies have documented that market concentration has risen among U.S. firms in recent decades. In this paper, we show that this rise in concentration was accompanied by tougher product market competition due to the entry of foreign competitors. Using confidential census data covering the universe of all firm sales in the U.S. manufacturing sector, we find that rising import competition increased concentration among U.S. firms by reallocating sales from smaller to larger U.S. firms and by causing firm exit. However, this increase in concentration was counteracted by the expansion of foreign firms, which reduced domestic firms' share of the U.S. market inclusive of foreign firms' sales. We find that once the sales of foreign exporters are taken into account, U.S. marketconcentration in manufacturing was stable between 1992 and 2012.
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A Long View of Employment Growth and Firm Dynamics in the United States: Importers vs. Exporters vs. Non-Traders
December 2021
Working Paper Number:
CES-21-38
The first experimental product from the U.S. Census Bureau's Business Dynamics Statistics (BDS) program -- BDS-Goods Traders -- provides annual, public-use measures of business dynamics by four mutually exclusive goods-trading classifications: exporter only, importer only, exporter and importer, and non-trader. The BDS-Goods Traders offers a comprehensive view of employment growth at firms associated with goods trading activities in the United States from 1992-2019. We highlight three patterns. First, employment is skewed towards goods traders in several ways. Only 6% of all U.S. firms are goods traders but they account for half of total employment. Moreover, 80% of large firms and 70% of older firms are goods traders. Second, exporter-importer firms represent 70% of manufacturing employment and over half of employment in services-producing industries (management, retail, transportation, utilities, and wholesale). Third, goods-traders exhibit higher net job creation rates than non-traders controlling for firm size, age, and sector. Goods traders contribution to total job creation grows over time, rising to more than half after 2008.
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A Search and Learning Model of Export Dynamics
August 2021
Working Paper Number:
CES-21-17
Exporting abroad is much harder than selling at home, and overcoming hurdles to exporting takes time. Our goal is to identify specific barriers to exporting and to measure their importance. We develop a model of firm-level export dynamics that features costly customer search, network effects in finding buyers, and learning about product appeal. Fitting the model to customs records of U.S. imports of manufactures from Colombia we replicate patterns of exporter maturation. A potentially valuable intangible asset of a firm is its customer base and knowledge of a market. Our model delivers some striking estimates of what such assets are worth. Averaging across active exporters, the loss from total market amnesia (losing its current U.S. customer base along with its accumulated knowledge of product appeal) is US$ 3.4 million, about 34 percent of the value of exporting overall. About half is the loss of future sales to existing customers while the rest is the cost of relearning its appeal in the market and reestablishing visibility as an exporter. Given the importance of search, learning, and visibility, the 5-year response of total export sales to an exchange rate shock exceeds the 1-year response by about 40 percent.
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Identifying U.S. Merchandise Traders: Integrating Customs Transactions with Business Administrative Data
September 2020
Working Paper Number:
CES-20-28
This paper describes the construction of the Longitudinal Firm Trade Transactions Database (LFTTD) enabling the identification of merchandise traders - exporters and importers - in the U.S. Census Bureau's Business Register (BR). The LFTTD links merchandise export and import transactions from customs declaration forms to the BR beginning in 1992 through the present. We employ a combination of deterministic and probabilistic matching algorithms to assign a unique firm identifier in the BR to a merchandise export or import transaction record. On average, we match 89 percent of export and import values to a firm identifier. In 1992, we match 79 (88) percent of export (import) value; in 2017, we match 92 (96) percent of export (import) value. Trade transactions in year t are matched to years between 1976 and t+1 of the BR. On average, 94 percent of the trade value matches to a firm in year t of the BR. The LFTTD provides the most comprehensive identification of and the foundation for the analysis of goods trading firms in the U.S. economy.
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Rising Import Tariffs, Falling Export Growth: When Modern Supply Chains Meet Old-Style Protectionism
January 2020
Working Paper Number:
CES-20-01
We examine the impacts of the 2018-2019 U.S. import tariff increases on U.S. export growth through the lens of supply chain linkages. Using 2016 confidential firm-trade linked data, we document the implied incidence and scope of new import tariffs. Firms that eventually faced tariff increases on their imports accounted for 84% of all exports and represented 65% of manufacturing employment. For all affected firms, the implied cost is $900 per worker in new duties. To estimate the effect on U.S. export growth, we construct product-level measures of import tariff exposure of U.S. exports from the underlying firm micro data. More exposed products experienced 2 percentage point lower growth relative to products with no exposure. The decline in exports is equivalent to an ad valorem tariff on U.S. exports of almost 2% for the typical product and almost 4% for products with higher than average exposure.
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