Essays on International Trade

This dissertation consists of three essays on international trade. The three essays are related to online trade intermediaries, information frictions and supply risk in cross border trade. Chapter 1 answers the question how goods flows on the internet are different from conventional trade flows. Chapter 2 suggests the reputation system provided by online intermediaries can drive trade growth. Chapter 3 investigates how supply risk affects importer's sourcing decisions when exchange rates fluctuate.;Chapter 1 documents the unique patterns of trade growth on the internet using detailed tank tops trade transaction data from the world's leading cross-border trade platform, Aliexpress. The key question we seek to answer is: does online trade growth follow a different pattern than conventional trade growth? We find a set of new patterns that describe goods flows over the internet. First, countries with greater distance and trust import more online. Second, firms export more products to more destinations online. Third, the importer and the market extensive margins contribute the most to the growth of existing online exporters while the intensive margin contributes the most to the growth of new online exporters. Fourth, Online exports are more concentrated on "superstar" exporters. Fifth, online trade exhibits higher relationship turnover rates. To explain the differences between online and conventional trade flows, the paper empirically evaluates the role of online trade intermediaries in reducing information frictions and find that information on the internet exerts a significant effect on import decisions.;Chapter 2 quantifies the effect of an exporter's reputation on her performance and further evaluates the impact of a reputation system on the distribution of exports and aggregate export flows. The study first establishes a causal linkage between an exporter's reputation and her performance. A dynamic pricing model is then developed to explain the stylized facts drawn from Aliexpress. The model predicts that high quality exporters subsidize importer learning and are more likely to grow into superstar exporters. As a result, the reputation system reallocates market demand from low quality exporters to high quality exporters. By recovering structural parameters from SMM estimation, we find a 34 percent increase in aggregate export revenue and a 66-percent increase in the export market share of top 1 percent exporters brought by the reputation system.;Chapter 3 empirically examines the existence of foreign supply risk and explores how risk of foreign suppliers affects import decisions. The paper develops a partial equilibrium model in which importers' productivity is positively correlated with the risk they are able to assume. Hence, export flows of high-risk suppliers are more sensitive to exchange rate fluctuations. The paper constructs different measures of supply risk based on suppliers' ratings left by previous importers and find a connection between exporters' supply risk and their exchange rate elasticities.