Sarah Oliver

"Estimating Trade Costs of Non-Tariff Measures in Services: A Comparison of Methods and Measures" (2024). USITC Office of Industry and Competitiveness Analysis Working Paper ICA-107.

• Abstract: This paper considers the effectiveness of recent methodologies proposed by Heid, Larch, and Yotov (2021) and Herman (2022) to estimate tariff equivalent trade costs for non-tariff measures (NTMs) in cross-border services trade. Both estimation methods show that for most services trade categories across four indices measuring services NTMs, tariff equivalent trade costs are significantly higher for exporters to countries with stricter NTMs, suggesting that both methodologies are successful at capturing variation in trade costs across different markets. Additionally, for transportation, banking, and insurance services, the difference in estimated tariff equivalent trade costs between the Heid et al. (2021) and Herman (2022) methods were smaller than 5 percentage points, suggesting that the Herman (2022) methodology could be useful in cases where collection of domestic trade data required for the Heid et al. (2021) method are unfeasible.

"Can Trade Barriers Explain Productivity Differences Between Foreign and Domestic Services Firms?" (2020). USITC Office of Economics Working Paper 2020-05-B (with Saad Ahmad and Caroline Peters).

• Abstract:  Modern trade theory posits that foreign firms are more productive than those that only serve the domestic market. By combining a rich firm-level dataset with measures of trade barriers in services sectors at the country and sector level, we examine if productivity differences between domestic and foreign services firms are related to the regulatory barriers foreign firms face to enter the domestic market. Overall, at both the firm- and sector-level, we find a significant and positive relationship between services trade barriers and observed differences in productivity between domestic and foreign firms. Our findings support the view that only the most productive foreign firms incur the significant costs associated with regulatory barriers to serve the domestic markets through their foreign affiliates. 

"Building Vehicle Autonomy: Sensors, Semiconductors, Software, and U.S. Competitiveness." (2019). USITC Office of Industries Working Paper ID-063 (with David Coffin and John VerWey).

• Abstract: This paper describes the current state of driving automation, the components that go into autonomous vehicles, and U.S. firm participation in the sector. There are three main components that enable autonomous driving: sensors, semiconductors, and software. Sensors, including cameras, Light Detection and Ranging (LiDAR), and radar are used together to help vehicles see road conditions at various distances, and in different weather and lighting conditions. Semiconductors facilitate the processing of data gathered by sensors in order to make real time driving decisions. Machine learning and mapping software provide the tools to improve the operation and decision making of vehicles. U.S. firms, including vehicle manufacturers, parts suppliers, and tech companies are competing across all of the components of driving automation. As a new area of competition, there are opportunities for startups and for firms to move into new areas (e.g., vehicle manufacturers developing chips, and technology companies supplying automotive parts). 

Oliver, Sarah. (2019). "The Value of U.S. Service Employment in Manufacturing Sectors." Journal of International Commerce and Economics, September 2019.

• Abstract: Using data on service occupations in U.S. manufacturing sectors in 2016, this paper seeks to highlight the value of in-house services in U.S. manufacturing output, by assessing the relationship between the share of services occupations in a particular sector (services occupation intensity) and typical education and compensation in service occupations. Overall, this paper finds a positive and significant relationship between services intensity and the typical education level of service workers within sectors, and a positive and significant relationship between service intensity and the average compensation of service occupations across sectors. For U.S. manufacturing sectors, these in-house services represented between $8.7 and $17.5 billion in additional services value added in 2016 compared to $56.8 billion for intermediate services inputs in the same year. 

"Using Firm-Level Data to Compare Productivities across Countries and Sectors: Possibilities and Challenges." (2018).  USITC Office of Economics Working Paper 2018-07-A. (with Saad Ahmad and Caroline Peters)

• Abstract: A five-year panel of cross-country data for 2012-2016 drawn from the Orbis database is used to evaluate the advantages and shortcomings of this data source in calculating firm level productivity. We find that conditional on the productivity measure employed, country and sector coverage can vary widely in the Orbis database due to different national reporting requirements across countries. This paper also compares the average productivity of the same sector across countries and the average productivity of domestic and foreign owned firms in the same sector. In every type of productivity calculation employed in this analysis, foreign firms are significantly more productive than their domestic counterparts. 

"Do Non-Tariff Measures Make Domestic Firms More Profitable? Evidence from the Commercial Banking Sector." (2017). USITC Office of Industries Working Paper ID-047.

• Abstract: Using firm level data for a sample of 78 country markets in 2012, this paper analyzes the relationship between the severity of non-tariff measures related to the entry and operation of foreign firms and firm profitability in the commercial banking sector, and differentiates the impact of these non-tariff measures on foreign-owned and domestic firms. Overall, there is a non-linear relationship between the level of restrictions and the profitability of firms. Banks in countries with low levels of restriction are significantly more profitable than banks in countries with no restrictions, while banks in countries with moderate levels of restriction are less profitable than banks in countries with no restrictions. Additionally, foreign owned firms are significantly more profitable than domestic firms when there are no restrictions on the entry and operation of foreign firms, but less profitable than domestically owned firms at both low and moderate levels of restriction. 

"Firm Level Analysis of Services Trade Restrictions in the Life Insurance Industry." (2016). USITC Office of Industries Working Paper ID-045. (with Tamar Khachaturian)

• Abstract: This paper presents a simple econometric framework to assess the impact of barriers on the profitability and the number of firms (participation) that supply life insurance services across countries. The average impact of restrictions on participation is negative and statistically significant in some specifications, lending modest support for the hypothesis that restrictions limit firm participation across countries. However, we do not find a statistically significant relationship between restrictions and average life insurance profitability, which may be due to the unique business models of life insurance firms. Depending on data availability, avenues for future research include examining profitability over a longer time horizon and differentiating the impact of restrictions on foreign versus domestic firms. 

"An Anatomy of Billionaire Wealth." (2016). PIIE Working Paper 16.1.  (with Caroline Freund)

• Abstract: This working paper presents a new dataset on the sources of billionaire wealth and uses it to describe changes in extreme wealth in the United States, Europe, and other advanced countries. The data classify wealth as either self-made or inherited and identify the company and industry from which it comes. Among self-made billionaires, individuals are further classified as company founders, executives, politically-connected, or in finance. Data analysis shows that the superrich in the United States are more dynamic than in Europe. Just over half of European billionaires inherited their fortunes, as compared with one-third in the United States. The median age of a company of an European billionaire is nearly 20 years older than that of an American billionaire. Traditional sectors explain more than half of the rise in wealth in Europe; the financial sector and technology-related sectors together are largely responsible for the rise in US wealth. There is some evidence that rents are higher in the United States than Europe, as not only is the number of US billionaires expanding rapidly, but US billionaires are also getting richer on average over time, especially when wealth is connected to resources, nontradables, or finance. 

"Gains from Harmonizing US and EU Auto Regulations under the Transatlantic Trade and Investment Partnership." (2015) PIIE Policy Brief 15-10. (with Caroline Freund)

• Abstract: Regulatory standards protect consumers from defective products, but they impede trade when they differ across countries. The Transatlantic Trade and Investment Partnership (TTIP) seeks to reduce distortions in the automobile and other industries. This paper evaluates the equivalence of automobile regulations in the United States and the European Union in terms of catastrophe avoidance and estimate the trade gains from harmonization. The UN 1958 Agreement on automobiles, which harmonizes regulations among signatories, is used to quantify the trade effect of regulatory convergence. The removal of regulatory differences in autos is estimated to increase trade by 20 percent or more. The effect on trade from harmonizing standards is only slightly smaller than the effect of EU accession on auto trade. The large economic gains from regulatory harmonization imply that TTIP has the potential to improve productivity while lowering prices and enhancing variety for consumers. 

"Three Essays on Trade in Services, Technology, and the COVID-19 Pandemic" (2024).

• Abstract:  Trade in services is unique from goods trade because the trade costs associated with services exports depend on whether the service is delivered in-person (via travel of producer or consumer) or remotely (via the internet). The primary goals of this dissertation are to better understand the role of the internet in determining trade costs in services trade and how the types of services traded affect public policy decisions. In chapter 1, I consider the relationship between internet connectivity and distance-related trade costs in services trade. On aggregate and for 7 of the 10 services sectors considered, increases in the level of internet connectivity across country-pairs significantly decrease distance costs for services trade. The decrease in distance costs ranges from 3–32 percent, depending on the sector and level of internet connectivity. However, this result does not hold for aggregate goods trade using the same sample of countries.

Building on the trade-in-task framework of Grossman and Rossi-Hansberg (2008), chapter 2 develops a task-based model of services trade that explains choice of delivering intermediate services tasks to customers in foreign markets either in-person or over the internet. In tests of the model, I find that U.S. services exporters with a higher concentration of in-person only employees face significantly higher trade costs than those with employees more concentrated in occupations that can be performed online. Additionally, higher internet use in the importing country significantly decrease trade costs, and sectors with more in-person only employees are more sensitive to changes in commercial flight prices.

Finally, chapter 3 considers the relationship between the importance of travel services exports and the decision to close international borders to non-essential travel during the COVID-19 pandemic. Using bilateral data on the presence of a COVID-19 travel ban, I find that country-pairs with larger values and shares of travel services exports in 2019 are significantly less likely to impose travel bans during the COVID-19 pandemic and reopen their borders significantly more quickly than country-pairs with smaller values and shares of travel services exports.