Date of Award

Fall 2025

Project Type

Dissertation

Program or Major

Economics

Degree Name

Doctor of Philosophy

First Advisor

Loris Rubini

Second Advisor

Bruce Elmslie

Third Advisor

Yin Germaschewski

Abstract

This dissertation has two chapters.In Chapter 1, I develop a model of international trade with innovation and trade surplus to examine the effects of China’s large trade surplus on productivity. I abstract from future benefits from holding a present trade surplus and focus on the present gains in productivity. I find that the average productivity increase caused by trade surplus ranges from 1.2 percentage points to 5.46 percentage points when the innovation cost changes. These results explain China’s long-term export promotion policies and align with its new policy goal of developing “new productivity forces”. I also identify a negative effect on China’s trade partners’ productivity (namely, the US), of between -2.74 percentage points and -5.89 percentage points. This comes at a welfare cost, equivalent to between 3 percentage points and 5.7 percentage points of consumption units. Correspondingly, China’s cheaper goods increase welfare in the US by between 0.26 percentage points and 1.22 percentage points of consumption equivalent units. In Chapter 2, I construct a new panel dataset from UN Comtrade data and investigate whether the composition of international trade reflects the structural transformation of the overall economy. The results show that trade dynamics illustrate the process of structural transformation, which contributes to the literature and highlights the importance of international trade in this process. I also find that imports and exports move faster to the service sector than the overall economy does.

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