Yrjö Jahnsson Award
2023 Award Recipients:
Jan De Loecker and Kalina Manova
Motivation:
Jan De Loecker, Professor of Economics at KU Leuven, has made important contributions to industrial organization, especially on the estimation of firm productivity and market power. Kalina Manova, Professor of Economics at University College London, has made important contributions to international economics, especially on the impact of financial market imperfections on international trade flows.
Jan De Loecker is an innovator in the estimation of productivity and markups using micro-level data in various contexts and markets. In individual work he has developed an empirical approach that combines a demand system with a production function to generate estimates of productivity when physical output at the firm level is not observed. In joint work with Frederic Warzynski, he has introduced a method to estimate plant-level markups using production data without specifying how firms compete in the product market. With Pinelopi Goldberg, Amit Khandelwal and Nina Pavcnik, he has put forth a framework to estimate markups from production data with multi-product firms, without making specific assumptions on the market structure or demand curves faced by firms, nor assumptions on how firms allocate their inputs across products. These contributions have shed new light on important issues not only for industrial organization, but also for international trade and economic development, enhancing the understanding of how markups and productivity come about and influence market outcomes.
Kalina Manova is an innovator in studying the effects of capital market frictions on international trade and multinational activity. In individual work she has shown both theoretically and empirically that credit constraints distort multiple dimensions of trade and multinational activity at the firm level with a cascading impact on trade performance, FDI patterns and gains from globalization at the aggregate level. As exporters require external capital, countries with weaker financial institutions export less in financially vulnerable sectors as they succeed in entering fewer markets, shipping fewer products to each destination, and selling less of each product. In joint work with Devin Chor, Manova has applied her insights to the analysis of the collapse of international trade flows during the global financial crisis, showing that credit conditions were an important channel through which the crisis affected trade volumes. In work with Shang-Jin Wei and Zhiwei Zhang, she has shown that FDI can alleviate the impact of domestic financial market imperfections on trade as multinational subsidiaries are less liquidity constrained because they can access foreign capital markets or funding from their parent company.
Award Committee: Manuel Arellano (Chair), Zvi Eckstein, Ari Hyytinen, Margaret Meyer and Gianmarco Ottaviano.