Using Equity Market Reactions to Infer Exposure to Trade Liberalization

90 Pages Posted: 14 Jul 2020 Last revised: 3 Mar 2022

See all articles by Andrew Greenland

Andrew Greenland

Elon University - Department of Economics

Mihai Ion

University of Arizona - Department of Finance

John Lopresti

College of William and Mary - Department of Economics

Peter Schott

Yale University

Multiple version iconThere are 2 versions of this paper

Date Written: July 2020

Abstract

We develop a new method for identifying firm exposure to changes in policy using asset prices that has several advantages over standard measures: it is natively firm level, it encompasses the net impact of all avenues of exposure, it yields estimates for firms in all sectors of the economy, and it captures aspects of policy change that can be difficult to quantify using standard approaches. We provide guidelines on how our method can be used in a wide range of settings and, applying it to two well-studied US trade liberalizations, find that it offers new insight into those policies’ distributional implications.

Suggested Citation

Greenland, Andrew and Ion, Mihai and Lopresti, John and Schott, Peter, Using Equity Market Reactions to Infer Exposure to Trade Liberalization (July 2020). NBER Working Paper No. w27510, Available at SSRN: https://ssrn.com/abstract=3649874

Andrew Greenland (Contact Author)

Elon University - Department of Economics ( email )

Elon, NC 27244
United States

Mihai Ion

University of Arizona - Department of Finance ( email )

McClelland Hall
P.O. Box 210108
Tucson, AZ 85721-0108
United States
5206210737 (Phone)

John Lopresti

College of William and Mary - Department of Economics ( email )

100 Ukrop Way
Morton Hall
Williamsburg, VA 23185
United States

HOME PAGE: http://wmpeople.wm.edu/site/page/jwlopresti/home

Peter Schott

Yale University ( email )

New Haven, CT 06520
United States

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