Research

The transport sector is the backbone of international trade and has faced multiple disruptions in recent years. I study the substitutability between different transport modes and how mode-specific trade cost shocks affect international trade flows. I use the closure of Russian airspace in 2022 as an exogenous change in transport costs to provide novel estimates of the elasticity of substitution between transport modes. To quantify the importance of this margin of adjustment in equilibrium, I develop a Ricardian model of international trade with multiple transport modes. Modes are substitutable but endogenous congestion forces limit substitutability. I apply this framework to quantify the effects of recent trade cost shocks such as the closure of Russian airspace and the Suez Canal blockage. Transport mode substitution reduces welfare losses by 4% relative to a non-substitution scenario. However, substitution has potentially negative consequences for the carbon footprint of international trade. Higher sea transport costs can lead to increased carbon emissions due to substitution toward more carbon-intensive air transport.
Presented at: ETSG, UEA European Meeting, GEP-CEPR Postgrad Conference, RIEF, EAYE, SETC, CEP/Warwick Junior Trade Workshop, Napoli Parthenope, Midwest Trade Conference, Norwegian School of Economics, World Bank Annual Conference on Transport Economics 2025.

We study how the interplay between oligopoly in the transportation industry and oligopsony power retained by non-atomistic importers affects the transmission of trade policy. Using Chilean customs data, we document strong concentration among carriers and importers and show that freight prices are determined through bilateral bargaining under two-sided market power. We develop and estimate a trade model that endogenizes transport cost, embedding oligopoly and oligopsony in transportation. We find sizable carrier markups, partially offset by importer bargaining power. We embed this mechanism into a quantitative trade model. We show that the endogenous response of trade cost driven by bilateral negotiations reduces the welfare cost of tariffs by 40% compared to the standard case of iceberg trade cost. Similarly, we find incomplete pass-through of shipping-related cost shocks, such as carbon policies, to transportation prices.
Presented at: Midwest Trade Conference^*, Naples Trade and Development Workshop^*, 17th FIW International Economics Conference, World Bank Annual Conference on Transport Economics 2025^*, International Seminar on Trade (ISoT)^*.
Awards: Young Economist Award at 17th FIW International Economics Conference
*by coauthor.

We estimate the effect of the Brexit process on UK-EU goods trade flows using bilateral trade data for 50 countries at the HS2 product level. Under a variety of ways of de-trending the data, we find that the effect of the short-term effect of shifting from EU membership trading arrangements to those of the “Trade and Cooperation Agreement” resulted in a fall in UK-EU trade of 17-18%. Both are robust to differences in how the model accounts for trends. By contrast, the longer-run effect on UK-EU trade, comparing pre-referendum with post-TCA flows, is sensitive to whether and how trends are included. Splitting the results by product type, we find that the effects associated with TCA implementation work via consumer goods and intermediate goods, with no significant effect on capital goods. Splitting by trade elasticity, we find no apparent correlation between the effect on trade and the canonical estimates of the goods level trade elasticity of Fontagné et al. (2022).
Presented at: ASSA meeting 2024^*, Economics of Global Ineraction 2023^*, ETSG 2024^*, Midwest Trade Conference^*.
*by coauthor.