It's Not You, It's Me: Prices, Quality, and Switching in US-China Trade Relationships

• 成果类型: Article
• 署名作者: Monarch, Ryan
• 署名单位: Syracuse University
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_01015
• 发表日期: 2022-09
• 页码: 909-928
• 关键词: choice; models; margins; gains; COSTS; FIRMS

摘要

Costs from switching suppliers can affect prices by discouraging buyer movements from high- to low-cost sellers. This paper uses confidential data on U.S. importers and their Chinese exporters to investigate these costs. I find barriers to supplier adjustments: nearly half of importers keep their partner over time. Importers switch less if their supplier offers higher quality or provides lower prices. I propose and structurally estimate a dynamic discrete choice model to compute switching costs. Cost estimates are large, heterogeneous across products, and matter for trade prices: halving switching costs reduces the U.S.-China Import Price Index by 7.6%.